Navigating the ASX: Unpacking the Top-Performing Listed Investment Companies
The Australian Securities Exchange (ASX) is home to a diverse range of Listed Investment Companies (LICs), offering investors a unique way to access actively managed pooled capital. These closed-end funds operate like regular stocks, but their share prices can diverge from the underlying value of their assets due to market supply and demand. This often results in LICs trading at a discount to their Net Tangible Assets (NTA), presenting potential opportunities for savvy investors.
Currently, 91 LICs are listed on the ASX, a slight increase from the previous year. The majority of these focus on Australian equities (45), followed by international equities (31), with the remaining funds diversifying into areas like infrastructure, private equity, and credit.
To help investors identify the cream of the crop, a comprehensive analysis has been conducted, evaluating LICs based on their performance over the past five financial years (FY21-25). This assessment focuses on key metrics that go beyond simple returns, highlighting consistency and risk management.
Key Performance Metrics Evaluated:
- Risk-Adjusted Total Shareholder Return (TSR): This metric measures how much return a fund delivers for each unit of volatility. A fund achieving a solid return with minimal price fluctuations will score higher than one with a higher return but significant year-to-year swings. TSR encompasses both capital gains and dividends.
- Risk-Adjusted Dividend Yield: Similar to risk-adjusted TSR, this metric assesses the stability of a fund’s dividend yield relative to its inherent volatility.
- Most Consistent Dividend Yield: This metric quantifies how stable a fund’s dividend yield is when compared to its own historical average.
- Most Consistent TSR: This measures the stability of a fund’s total shareholder returns over time, indicating its ability to deliver predictable growth.
Aggregate Performance Snapshot:
For FY25:
* Average Dividend Yield: 7.55%
* Median Dividend Yield: 5.97%
* Average Total Shareholder Return (TSR): 7.07%
For the last five years (FY21-25):
* Average Dividend Yield: 6.84%
* Median Dividend Yield: 5.45%
* Average TSR: 12.35%
As of 28 February 2026, the average LIC was trading at a discount of 9.27% to its pre-tax NTA. For perspective, the widely held Vanguard Australian Shares ETF (ASX: VAS) averaged a yield of 3.35% with an average TSR of 12.22% over the FY21-25 period. On a total return basis, the average LIC has shown a slight outperformance compared to VAS (before accounting for fees).
The LICs Worth Watching:
The analysis plotted each LIC’s risk-adjusted dividend yield against its risk-adjusted TSR, with the size of the bubble representing the average dividend yield. The ideal LIC would be positioned in the top-right corner of this chart, signifying reliable income and smooth total returns. While this ideal scenario is difficult to achieve, several LICs come close to this benchmark.
Here’s a closer look at some of the standout performers:
Global Value Fund (ASX: GVF): Managed by Staude Capital, GVF is considered one of the most well-rounded LICs. It specialises in acquiring global assets trading below their intrinsic value and works to realise this discount through strategic catalysts. The fund offers a robust average yield of 5.7%, which has remained remarkably stable year-on-year. Its total returns have averaged a smooth 14.9% annually, and it was one of the few funds to avoid negative returns in FY22, positioning it favourably in the performance chart.
Katana Capital (ASX: KAT): Despite being the smallest fund on the list with a market capitalisation of $43 million, Katana Capital has demonstrated consistent performance. While its average yield of 1.76% is modest, its total returns have averaged 11.24% over the last five years. Notably, KAT was also among the few funds to record positive returns in FY22, underscoring its resilience.
Metrics Income Opportunities Trust (ASX: MOT): Managed by Metrics Credit Partners, this trust offers an attractive average yield of 8.0%. A key advantage is the steady, climbing nature of its dividend payouts, rather than erratic jumps. While its share price can experience more volatility, it remains a compelling option for investors prioritising income. MOT’s investment strategy spans the breadth of Australian private credit, including loans, notes, bonds, and equity-like instruments.
Whitefield Industrials (ASX: WHF): This LIC stands out as the most predictable dividend payer within the analysed dataset. Its dividend yield has consistently hovered between 3.7% and 4.0% over the past five years, a level of income stability unmatched by other LICs. WHF follows a traditional approach, investing in a portfolio of large-cap Australian industrial shares (excluding resources) with a focus on companies known for their reliable, fully franked dividends. However, its returns are heavily influenced by dividends, with an average annual dividend yield of 3.90% contributing to a total return of just 4.64% over the last four years.
BKI, GCI, and MXT: These three LICs form a closely aligned group of income-focused funds that have achieved remarkably smooth total returns. They have excelled at mitigating significant drawdowns while providing a modest dividend yield.
WAM Microcap (ASX: WMI): This fund distinguishes itself by pairing an unusually high yield with consistent payout delivery. Its average yield of 7.0% has remained largely stable over five years, making it the highest-yielding fund among those with the most consistent dividends. However, investors should be aware that its share price is more volatile, a common characteristic of microcap investing. Despite this, total returns have averaged a respectable 13%. WMI, managed by Wilson Asset Management, invests in micro and small-cap ASX companies and benefits from a profit reserve strategy designed to smooth future dividends by banking excess returns in strong years.
Regal (ASX: RF1): Regal offers the highest returns within the analysed group, but this comes with significantly higher volatility, placing it in the lower-left quadrant of the performance chart. Its average total return of 26.7% and average yield of 11.7% are impressive, but the year-to-year fluctuations are substantial. For instance, the fund’s TSR was a remarkable 139.8% in FY21, followed by a sharp -28.7% in FY22 and a flat FY23. Regal Partners manages this multi-strategy fund, which encompasses market-neutral equities, global alpha, small-caps, water rights, and resource royalties.
Understanding Discounts to NTA:
The prevalence of discounts to NTA among LICs can be attributed to several factors, including lower liquidity, higher management fees, a growing investor preference for Exchange Traded Funds (ETFs), and potential latent tax liabilities.
Conversely, a select few LICs trade at a premium to their NTA. These include GVF (+8.1%), PL8 (+19.9%), PGF (+8.9%), WMI (+17.6%), ECL (+16.3%), and GLS (+13.8%).
Interestingly, many of the older, “old-school” LICs that exhibit strong consistency metrics, such as AUI, WHF, DUI, and CIN, are trading at deep discounts of 18–22%, despite their proven track records.
The Bottom Line:
While most LICs may underperform low-cost index ETFs like VAS over the long term, particularly after accounting for fees, a select few stand out for investors who prioritise income stability and are willing to conduct thorough research. These funds offer reliable dividends, smoother returns, or a combination of both.
The inherent challenge remains that past performance is not a guarantee of future results. The persistent discounts observed on some of the top-performing LICs suggest that the market may still hold some scepticism regarding the value proposition of these investment vehicles. For those willing to navigate these nuances, a handful of LICs present compelling opportunities for a well-rounded investment portfolio.
