A 10% profit surge has been recorded by the Australian Foundation Investment Company (AFIC) in the 2012-2013 financial year.

As the largest listed investment company in Australia, AFIC accumulated a net profit of $242.8 million in the current financial year. Finance professionals believe that the Australian market has benefited from certain interest rate cuts throughout the year.

“The Australian market enjoyed strong returns for the year, driven largely by the falling interest rate environment and the rising US market,” the company emphasised in a formal statement.

The company, however, has added that global and domestic markets have weakened, thus requiring high level of vigilance from economists and finance strategists.

"Whilst the present environment causes us to approach the upcoming year with some caution, we believe AFIC's portfolio is well positioned, including having a strong level of cash to continue the process of investing in sound businesses with good long-term prospects when value is on offer," AFIC added.

According to AFIC, the financial return on its portfolio of holdings was approximately 24.4% during the financial year. The rate is above the 22.8% recorded by the S&P/ASX 200 Index. The portfolio’s performance was influenced by primary bank holdings, along with high-yielding stocks such as Telstra and Wesfarmers.

AFIC will pay 14 cents per share to its shareholders; investors would have received a dividend of 22 cents—fully franked—throughout the financial year.

Up to date, AFIC shares are being traded at 2 cents higher, totalling a price of $5.58.

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