Question 1

What is the difference between an LIC and an LIT?

Accepted Answer

LICs are companies that may pay franked dividends; LITs are trusts that distribute income. Both trade on the ASX.

Question 2

Why do LICs and LITs trade at a premium or discount?

Accepted Answer

Because their share price is set by market demand, which can differ from the underlying net asset value of the portfolio.

Question 3

Are LICs and LITs open to retail investors?

Accepted Answer

Yes — they are listed on the ASX and can be bought and sold like shares through a broker.

LICs and LITs in Australia