Sydney Morning Herald "A decent return can be found"

John Collett goes in search of investments that will perform better than term deposits.

Financial planner and founder of Hewison Private Wealth, John Hewison, says the big listed investment companies, such as Argo Investments and Australian Foundation Investment Company, can be a better way to invest in shares, rather than investing in shares directly.

 These listed investment companies invest in the larger, Australian-listed companies and have very low management fees. Hewison has recommended to clients a strategy where the dividends paid by the listed investment companies are used to buy more shares in them. He has clients who have been invested this way for more than a decade.

 They have done exceptionally well over that time, he says. Argo and AFIC have ''terrific track records over decades'', Hewison says.

Though the potential returns from investing in shares is greater than other type of investments, there will also be greater volatility. 

During the past four years, since the start of the GFC, shares have performed poorly. Argo and AFIC shares are paying a dividend yield of about 5 per cent, or about 7 per cent after franking credits, Hewison says.

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