L1 Long Short Fund Declares 3.7c Dividend After 44.7% Annual Return

Strong Investment Performance Drives Dividend Growth

L1 Long Short Fund Limited (ASX:LSF) has once again delivered impressive returns, posting a net portfolio return of 44.7% over the 12 months ending 31 March 2026. This performance dwarfs the ASX200 Accumulation Index’s 11.7% return over the same period, underscoring the fund’s ability to generate alpha in a competitive market. Over longer horizons, LSF has maintained consistent outperformance, delivering 15.9% p.a. over three years and 16.1% p.a. over five years, both comfortably ahead of the ASX200AI benchmarks.

These returns are reflected in LSF’s dividend track record, which has seen a steady increase since its April 2018 IPO. The fund has transitioned from half-yearly to quarterly dividend payments starting FY26, signaling confidence in the sustainability of its income stream. The most recent dividend declaration is a fully franked 3.7 cents per share, payable on 22 June 2026, bringing total dividends for the financial year to date to 10.8 cents per share.

Dividend Reinvestment Plan Offers Cost-Effective Growth

Shareholders are invited to participate in LSF’s Dividend Reinvestment Plan (DRP), which allows reinvestment of dividends without brokerage or transaction costs. The DRP offers flexibility, enabling investors to elect participation for all or part of their dividends and to adjust their participation on a per-dividend basis. The deadline to participate in the upcoming dividend is 3 June 2026.

This DRP mechanism has been a feature of LSF’s shareholder engagement for some time, with previous DRP prices set at AUD 3.59 and AUD 4.34 for prior dividends, reflecting the fund’s valuation dynamics and providing shareholders with an efficient way to compound their investment. The fund’s DRP participation has been well supported by investors appreciating the frictionless share accumulation option.

Dividend Growth Reflects Underlying Profitability and Market Confidence

LSF’s dividend growth parallels its financial turnaround, highlighted by a $415 million net profit for the half-year ending December 2025. This profit surge was driven by strong returns from resources, gold, and domestic cyclicals, which also supported a 3.6 cent fully franked interim dividend earlier this year. The fund’s ability to increase dividends steadily, even amid market volatility, reflects robust portfolio management and a clear strategy to reward shareholders consistently.

The fund’s move to quarterly dividends in FY26 is a notable shift, aligning with its growing scale and stable income generation. This cadence offers investors more frequent income and potentially smoother cash flow, which may be particularly appealing in the current low-yield environment. It also signals management’s confidence in sustaining performance levels, even as broader markets face headwinds.

Shareholder Engagement and Future Considerations

Chairman Andrew Larke emphasised the importance of shareholder trust and ongoing support in the fund’s communications, highlighting plans to maintain dividend growth. The fund continues to engage investors through regular reports, webinars, and events, reinforcing transparency and accessibility.

While past performance is strong, LSF advises caution that historical returns are not necessarily indicative of future results. Investors will be watching how the fund navigates market conditions in the coming quarters, particularly with the increased frequency of dividend payments and ongoing DRP participation rates influencing capital structure.

LSF’s steady dividend increases and robust returns position it as a compelling income-focused investment in the Australian financial services sector, but the sustainability of this performance will be tested as market dynamics evolve.