Why Perpetual Equity Investment Company (ASX:PIC) is moving to monthly dividends despite lagging its benchmark

Sonal Goyal

04 November 2026 09:58 PM AEDT

Why Perpetual Equity Investment Company (ASX:PIC) is moving to monthly dividends despite lagging its benchmark

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Key Highlights

• PIC is moving from its current Dividend pattern to monthly payments.

• The board wants steadier income and a larger Shareholder base.

• The portfolio of Australian and global listed securities is selected by Perpetual.

• The first monthly dividend is due in December 2026.

Perpetual Equity Investment Company (ASX:PIC) is switching to monthly dividends because its board wants to offer a steadier income stream and to grow its shareholder base, even though the portfolio has lagged its benchmark. The change was set out with the FY26 results, with the first monthly payment expected in December 2026.

What PIC is

PIC is a listed investment company. Its portfolio of Australian and global listed securities is selected by Perpetual Investment Management Limited, with Vince Pezzullo and Sean Roger as co-portfolio managers.

Shareholders hold shares in the company, not units in a trust, and the Market Price can sit above or below the Net Tangible Assets (NTA) backing each share. PIC listed on 18 December 2014.

The FY26 result

In its 2026 Annual General Meeting materials, PIC reported net profit after tax of A$12.1 million for the year to 30 June 2026, lower than the prior year because of softer investment performance. The portfolio returned 2.8 per cent over the year, which the chair said was below its benchmark.

Chair Nancy Fox had sought re-election to support an orderly succession, to serve until the 2027 annual general meeting.

Over five years the portfolio returned 5.0 per cent a year. The board said small and mid-cap exposure weighed on short-term performance while large companies rallied.

Why the dividend is changing

PIC paid 8.0 cents per share in fully franked dividends for FY26, matching FY25 and described as the highest since inception. The final dividend of 4.0 cents went ex on 8 September 2026 and was paid on 1 October.

After that payment, profit reserves were A$63 million, or 16.4 cents per share, equal to about two years of dividends at the current rate. The franking account held A$13.8 million, equal to about one year of fully franked dividends.

The board plans monthly payments with quarterly announcements. Reserves and franking credits, rather than any guarantee, support the payouts, so profit and tax paid will matter over time.

Where the portfolio stands

It had 385,264,407 shares on issue, a Market Value of A$439 million.

The portfolio fell 4.0 per cent in September, while the S&P/ASX 300 Accumulation index fell 2.4 per cent. Over one year it returned negative 3.4 per cent against 2.4 per cent for the index, and over three years 6.2 per cent a year against 11.3 per cent.

The longer record is closer to the index: since inception PIC has returned 8.2 per cent a year against 8.8 per cent.

Holdings and risks

The largest holdings at 30 September 2026 were Rio Tinto at 8.4 per cent, Washington H. Soul Pattinson at 6.8 per cent, Goodman Group at 4.4 per cent, BHP at 4.1 per cent and Suncorp at 4.0 per cent. The manager is overweight Soul Pattinson, News Corporation and Rio Tinto, and does not hold Commonwealth Bank or National Australia Bank.

Active positions of this kind mean returns can diverge from the index in either direction.

Aspen Group fell 12.1 per cent in September and Pinnacle Investment Management fell 21.3 per cent after audit delays at Metrics Credit Partners.

The manager describes the outlook for Australian corporates as tough and favours quality companies with strong balance sheets.

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