In this guide
Listed investment companies (LICs) and listed investment trusts (LITs) are like managed funds and exchange-traded funds (ETFs) in that your money is pooled with other investors in a professionally managed portfolio of assets.
All allow individual investors to achieve greater diversification than they could on their own. They are also an effective way to plug holes in your investment portfolio through exposure to asset classes and market sectors you might otherwise find difficult to access.
As the name suggests, LICs use a company structure, while LITs are trusts that generally take the form of an Australian Managed Investment Scheme (MIS).
A venerable history
LICs are the grandaddies of the Australian listed managed investment scene.
The two biggest LICs by value, Australian Foundation Investment Company (AFIC) and Argo Investments, have been around since 1928 and 1946, respectively. Both are long-term investors in Australian shares with a buy-and-hold philosophy, which keeps costs low.
Like ETFs, LICs and LITs are listed on the Australian Securities Exchange (ASX) and can be bought and sold as easily as ordinary shares.
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Unlike ETFs, which are mostly passive index funds, LICs and LITs are actively managed by the fund manager who picks the underlying investments. This means they tend to be slightly more expensive than index ETFs.
There were 90 LICs and LITs listed on the ASX in June 2025 with a total market value of $53.2 billion. While still significant, their number and value have been declining in recent years, perhaps due in part to the increasing popularity of ETFs, which now number over 380.
A key difference between LICs and ETFs is that LICs are closed-ended investments with a fixed number of shares on issue. This provides stability as shares can only be traded between willing buyers and sellers.
This structure also means LICs tend to trade at a premium or discount to their net tangible assets (NTA), depending on their current share price. According to ASX statistics, in June 2025, fewer than 20 LICs were trading at a premium to NTA. While trading at a discount can mean issues with performance, the slump in LIC values also reflects the competition from ETFs and low-cost passive index funds.
By comparison, ETFs are open-ended, which means units in the fund can be created or redeemed according to investor demand without the share price being affected. As a result, ETFs always trade close to their NTA.
Australian shares most popular asset class for LIC investors
SMSF investors have long been big supporters of LICs because they offer a simple, easy-to-trade, low-cost way to diversify. While LICs and LITs traditionally focus on Australian shares, newer LICs and LITs offer access to global shares, income, infrastructure and property.
This is reflected in the fact that two of the top three most popular LICs with SMSF investors are the long-standing Australian share investors, Australian Foundation Investment Company and Argo.
According to Class, these two funds are held by 19.0% and 15.1% of SMSFs that hold LICs/LITs. Between them, they account for almost 22% of the total value of SMSF LIC/LIT investments.
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Find out moreHowever, MCP Master Income Fund has jumped to second place in the popularity stakes, attracting 6.2% of total SMSF LIC/LIT investments. MCP offers exposure to the Australian corporate loans market.
Also popular is Wilson Asset Management (WAM), which has three funds in the top 10: WAM Capital, WAM Leaders (Australian shares) and WAM Global (international shares).
As interest rates rise, SMSFs are also using LICs/LITs for alternative sources of income. Coming in at number four is the MCP Master Income Trust, which offers exposure to the Australian corporate loans market.
Sixth on the list, the L1 Long Short Fund is an absolute return fund that invests in Australian and global shares and derivatives. Absolute return funds aim to provide a positive return to investors in all market conditions.
20 most popular LICs/LITs invested in by SMSFs
The top 20 list below is ranked by the percentage of SMSFs holding these LICs/LITs, rather than the percentage each security makes up of total SMSF investments in LICs/LITs, although both figures are provided in the table.
| Rank | Security code | Description | % of funds with LIC/LITs that hold this security | % of total SMSF LIC/LIT investments |
|---|---|---|---|---|
| 1 | AFI | Australian Foundation Investment Company Limited (AFIC) | 19.0% | 11.9% |
| 2 | MXT | MCP Master Income Trust | 16.2% | 6.2% |
| 3 | ARG | Argo Investments Limited | 15.1% | 9.8% |
| 4 | WAM | WAM Capital | 10.7% | 3.9% |
| 5 | WLE | WAM Leaders Limited | 9.3% | 4.3% |
| 6 | LSF | L1 Long Short Fund | 9.2% | 4.1% |
| 7 | MFF | MFF Capital Investments Limited | 7.0% | 6.1% |
| 8 | WGB | WAM Global Limited | 6.2% | 2.4% |
| 9 | PGF | PM Capital Global Opportunities Fund Limited | 6.0% | 3.6% |
| 10 | PL8 | Plato Income Maximiser Limited | 6.0% | 3.6% |
| 11 | MOT | MCP Income Opportunities Trust | 5.4% | 1.9% |
| 12 | GCI | Gryphon Capital Income Trust | 5.4% | 2.0% |
| 13 | KKC | KKR Credit Income Fund | 5.1% | 1.6% |
| 14 | DJW | Djerriwarrh Investments Limited | 4.5% | 1.9% |
| 15 | QRI | Qualitas Real Estate Income Fund | 4.4% | 1.6% |
| 16 | BKI | BKI Investment Company Limited | 4.2% | 2.6% |
| 17 | PIC | Perpetual Investment Company | 4.0% | 1.6% |
| 18 | PCI | Perpetual Credit Income Trust | 4.0% | 1.3% |
| 19 | WQG | WCM Global Growth Limited | 3.9% | 1.8% |
| 20 | ALI | Argo Global Listed Infrastructure Limited | 3.5% | 1.2% |
| Total (Percentage that the top 20 make up of total SMSF investments in LIC/LITs) | 73.4% | |||
Source: Class. Data as of 30 June 2025. Data sourced from 189,000 SMSFs that use Class software.
It’s worth noting that the 20 most popular LICs/LITs represent 73.4% of total SMSF LIC/LIT investments, indicating the relatively shallow market for these investments compared with managed funds and ETFs.
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