Lanyon Investment Fund Active ETF (ASX:LNY) reported a sharp turnaround to a $30.3 million operating profit for the year ended 30 June 2026, driven overwhelmingly by gains on listed investments. Net assets rose to $146.2 million despite continued investor redemptions and a lower distribution than the prior year.
- $30.3 million operating profit, compared with a $741,846 loss
- $29.3 million in net realised and unrealised investment gains
- Net assets increased 11.9% to $146.2 million
- Listed equity holdings rose to $94.6 million
- Final distribution of 0.9824 cents per unit, totalling $755,395
Investment gains drive the turnaround
Lanyon Investment Fund Active ETF (ASX:LNY) swung from a $741,846 operating loss to a $30.3 million profit in the year to 30 June 2026, with the result resting almost entirely on a much stronger investment market outcome. Net gains on financial instruments reached $29.3 million, compared with a $2.4 million loss in the previous year.
The gain comprised $1.3 million of realised gains and $28.0 million of unrealised gains. That split is the central qualification to an otherwise striking result: most of the improvement reflected valuation gains still held in the portfolio at year-end, rather than cash profits already crystallised through sales.
Assets rise while redemptions continue
Net assets attributable to unitholders climbed 11.9% to $146.2 million, while the value of listed equity investments increased to $94.6 million from $84.8 million. Australian equities accounted for $73.8 million and international equities for $20.7 million at 30 June.
The balance sheet also held $52.7 million in cash. That liquidity helped absorb $21.5 million of redemptions during the year, although applications were considerably smaller at $6.9 million. Units on issue fell to 76.9 million from 84.1 million, meaning the increase in net assets came despite a smaller unit base.
Distribution remains modest relative to profit
LNY paid or declared total distributions of $1.48 million for the year, down from $4.49 million in 2025. The final distribution was 0.9824 cents per unit, or $755,395, with payment made on 20 July 2026.
The difference between the $30.3 million accounting profit and the $1.48 million distributed reflects the fund’s accounting treatment of unrealised gains. Those gains are included in net assets but are not generally distributed until realised and taxable income becomes available for distribution.
Portfolio concentration leaves market risk visible
All of the fund’s investment assets were listed equities at year-end, with no unlisted holdings or level-three assets requiring valuation based on significant unobservable inputs. A hypothetical 10% move in equity prices would have changed net assets by approximately $9.5 million in either direction, according to the fund’s sensitivity analysis.
Foreign exchange exposure also increased in several currencies, including the British pound, where the reported exposure reached $12.1 million. The fund recorded a $264,708 foreign exchange loss for the year, while its disclosures indicate that currency movements could materially affect net assets alongside share-price changes.
BDO issued an unqualified audit opinion, identifying the valuation of the $94.6 million listed portfolio as the key audit matter. The immediate question is whether the large unrealised gain can be converted into realised returns before market conditions change, particularly as the fund continues to face daily applications and redemptions.
Bottom Line?
The headline profit is strong, but the next test is whether the $28.0 million unrealised gain becomes durable performance rather than a one-year market uplift.
Questions in the middle?
- How much of the unrealised investment gain will be realised or reversed in the next reporting period?
- Can portfolio performance attract new applications while redemptions continue to exceed subscriptions?
- How will equity and foreign exchange sensitivity affect the fund’s net asset value if markets weaken?