There are two ways to measure a LIC’s performance, and they can produce very different results, but for us, what matters is the total shareholder return (TSR):
- Total shareholder return (TSR) – the return an investor actually received from owning the LIC on-market, including dividends plus any change in its share price;
The scoreboard to March 2026 highlights the challenge: around 60% of Australian equity LICs underperformed the All Ordinaries Accumulation Index over the year, while 61% of global equity LICs lagged their benchmark. Over FY21–25, the average LIC performed more competitively, but higher fees and movements in NTA discounts can significantly affect the return ultimately received by investors.
- For the average investor, the simplification and net performance of ETFs as a group make them more appealing.
The takeaway for MM is simple: most LICs struggle to consistently beat their benchmark after fees, but the better managers can outperform, while buying at an attractive discount to NTA can add another source of return, making successful LIC investing something of an art in itself.
However, not all managers are equal and not all pockets of the market have favoured passive ETFs over the years. This morning we’ve broken down these different areas, looking at the best performing LIC/LITs and comparative ETFs.
