By Ian Irvine, CEO, The Listed Investment Companies and Trust Association
This article is part of a special Australian Shareholders’ Association Insight Series exploring Listed Investment Vehicles (LIVs) – listed investment companies and trusts – that can provide diversification, professional management and income for individual investors.
Across five articles, the series will unpack what LIVs are, how they work, the potential benefits and risks and how they may complement a portfolio focused on longterm, shareholder aligned outcomes.
The aim is to equip ASA members and supporters with practical, independent education so you can make more informed decisions about whether LIVs deserve a place in your portfolio.
The series will be published on the ASA Insights platform over the coming weeks and is provided as general information only, not personal financial advice. We encourage you to read along, reflect on how these concepts relate to your own circumstances, and discuss any potential changes with a licensed adviser if appropriate.
What Are LIVs And Why They Matter
Listed investment vehicles (LIVs) are professionally managed companies or trusts that invest in a portfolio of assets and trade on the ASX like any other listed security. They include both Listed Investment Companies (LICs) and Listed Investment Trusts (LITs), and provide a simple gateway into diversified portfolios that many individual investors would find difficult to build on their own.
When you buy a share in a LIV, you become a part-owner of a professionally managed portfolio that may hold Australian shares, global equities, credit, private equity or alternative assets. Rather than researching, selecting, and administering a large number of individual holdings, investors can obtain broad exposure with a single trade through their broker or online platform. For many ASA members, that simplicity and the potential to complement existing direct shareholdings is itself a compelling reason to consider LIVs as part of a broader strategy.
One of the core structural strengths of LIVs is their closed-end nature, meaning capital size is generally stable rather than expanding or contracting daily with applications and redemptions. This stable capital structure avoids the costs and risks that would otherwise be incurred in administering and investing those applications and redemptions. It also allows managers to take a genuinely long-term view, hold less liquid or longer duration assets, and avoid being forced sellers in weak markets to fund investor withdrawals.
For ASA readers accustomed to scrutinising governance, LIVs also sit neatly within the listed company ecosystem. LICs are companies with boards elected by shareholders, and LITs are trusts with their own governance and tax frameworks, meaning investors have familiar mechanisms for oversight and engagement. This combination of listed-market transparency, closed-end stability, and professional portfolio management makes LIVs worthy of consideration as a building block alongside direct shares, ETFs and other managed vehicles in a diversified portfolio.
The next articles will examine diversification, income and longevity, governance and pricing, and practical portfolio applications.
