Listed Investment Companies are a closed end investment, meaning that management do not have to worry about people withdrawing funds. If people wish to exit the investment they can simply sell their shares, without affecting the amount of funds under management. This allows for management to take a more long term approach to investing if deemed favorable (Viney, 2007).
Traditional LICs employ this buy and hold strategy which can result in tax advantages (for example Australia's system of paying capital gains tax on only half of capital gains if an asset is held for 12 months). This strategy also amounts to lower costs for LICs and traditionally lower fees. However contemporary LICs often take a more active approach to portfolio management (Ross, 2007).
LICs provide a lot of diversification for investors, while often targeting specific markets, such as international equities, Indian equities, or Chinese property (Viney, 2007).