A: Argo (ARG) is a listed company, close ended. Has shares, pays dividends. Dividends are discretionary (as declared by the Directors), and will typically be fully franked. Trading on the ASX has no direct bearing to its underlying value – may trade at a discount or premium to its net tangible asset value.

 

Switzer Dividend Growth Fund (SWTZ) is a listed trust, open ended. Has units, pays distributions. Distributes all its income, and any associated tax benefits. Will trade on the ASX very close to its NTA – engages a market maker to ensure that there is an active, two way market in its units.

 

Both investments have similar, albeit slightly different, investment objectives.

 

From a tax point of view, there shouldn’t be much difference. Argo will pay half yearly franked dividends. With SWTZ, you get quarterly distributions, largely franked, and an annual tax statement that sets out the various components.