The 20 top LICs offering consistent, market-leading dividends

If you’re hunting for income, you’ve likely explored high-yielding stocks and ETFs. But have you considered a listed investment company (LIC)? These vehicles offer a more active approach, with fund managers working to maximise your returns.

Currently, 86 LICs trade on the ASX, each with distinct strategies and exposure to diverse markets and asset classes. In this wire, we're going to highlight some of the key performance data for LICs and take a deeper dive into those that have delivered a consistent dividend over the past five years.

 On average, as of 28 February 2025, the 86 LICs delivered:

• A 12-month share price return of 2.2%
• Top performers include: Fat Prophets Global Property Fund (+39.5%), Lion Selection Group (+33.7) and Ophir High Conviction Fund (+31.6%) 
• Worst performers include: Bentley Capital (-75%), Naos Small Cap (-48.8%), Naos Emerging Opportunities (-47.5%) and Naos Ex-50 (-46.8%)
• Of the LICs that do pay a dividend (71), the trailing 12-month average is 6.8%
• A five-year annual dividend yield of 6.1%
• Trading at a discount of 16.3% to net tangible assets (NTA)
• Management fees of 1.02%

Performance-wise, their portfolios have delivered:

• An average one-year return of 10.7%
• An average five-year annual return of 9.3% 

For context, the popular Vanguard Australian Shares ETF (ASX: VAS) gained 6.7% over the 12 months to 28 February 2025, with a dividend yield of roughly 3.8%. On a total return basis, VAS has slightly outpaced the average LIC — while charging far lower fees at 0.07%. 

That said, averages only tell part of the story. Many LICs have significantly outperformed the market, delivering both strong returns and dependable dividends.

Top 20 yielding LICs

The list below ranks LICs by their five-year average dividend yields, filtering out any funds with negative returns over the past one-and-five years. After all, a high dividend yield loses its appeal if the stock or fund’s overall performance is poor.

I’ve also included a column for dividend yield stability, labeled “CV”. A lower CV indicates more stable dividend yields, while a higher CV signals greater volatility.

An LIC like the Naos Emerging Opportunities (ASX: NCC) would be #2 on the list – boasting a dividend yield of 15.1% and a five-year average yield of 10.1%. However, its share price is down 47.5% in the past 12 months.

Likewise, Cordish Dixon has three private equity funds (tickers CD1, CD2 and CD3) that are known for delivering exceptionally high dividend yields, often exceeding 10% (CD1 even delivered a yield of 55% in 2020). But their ability to pay such crazy yields stem from leveraging cash flows from portfolio company exits. Since 2020, CD1 has paid out $1.69 per share in dividends but over the same time period, the stock has dropped around 65% (or down $1.05 per share).

Regal tops the leaderboard

The Real Investment Fund (ASX: RF1) is a clear winner across most key metrics including 12-month share price performance, 5-year average dividend yield and fund performance.

The fund provides exposure to alternative investment strategies, seeking to deliver risk-adjusted returns over a five-year-plus horizon, with low correlation to equity markets.

Taking a closer look, the fund portfolio has been constructed using a range of investment strategies, including:

• Market Neutral Strategy: A high-conviction, fundamentals-driven approach targeting strong returns with moderate risk and low equity market correlation.
• Global Alpha Strategy: Seeks steady, positive returns with low volatility, independent of equity market fluctuations.
• Australian Small Companies Strategy: Aims for gains from volatile small-cap ASX stocks, often outpacing the ASX Small Ordinaries Index.
• Water Strategy: Invests in Australian water assets, leasing them for returns and capital growth.
• Resources Royalties Strategy: Targets attractive, uncorrelated returns via natural resource royalties and commodity streams.

The exposure ranges vary between 0-50% for each strategy, which vary at any given time.

WAM dominance

The leaderboard is scattered with WAM’s listed investment companies, including WAM Capital, Research, Active and Microcap. These funds are widely known for their ability to deliver consistent capital growth and for building a profit reserve — a pool of retained earnings strategically withheld from current profits to support consistent dividends.

Taking a closer look at the flagship WAM Capital (ASX: WAM), its latest fund update from February 2025 highlights its ability to select some of the market’s strongest performers.

Interestingly, WAM Microcap (ASX: WMI) has also recorded the most consistent dividend yield (lowest CV) over the past five years, ranging between 6.15% and 7.47%.

Smaller LICs of interest

There are plenty of sub-$200 million market cap LICs on the list with interesting performances. Picking out a few interesting ones:

Cadence Capital, which focuses on listed equities to deliver above-market risk-adjusted returns, saw its portfolio decline 3.6% over the same period, recording a $7.8 million loss after tax. Heavy exposure to resource stocks, particularly coal names like Whitehaven Coal and Stanmore Resources dragged performance down, despite gains from Netflix, Meta Platforms, QBE Insurance, and Evolution Mining. However, these miners remain cash-generative and dividend-paying. Cadence also noted profit reserves of 9.5 cents per share, sufficient for roughly one and a half years of dividends at the current 3 cents per share rate.

The bottom line

LICs are grappling with a number of challenges like persistent discounts to NTAs, poor liquidity and fund underperformance.