There are not many ASX shares in my portfolio with a grossed-up dividend yield (including franking credits) of more than 7%. But, Hearts and Minds Investments Ltd (ASX: HM1) is one of the businesses with a big yield that I plan to hold for a long time.
It's a special type of listed investment company (LIC) – there are no management fees involved in this LIC. Instead, the LIC donates 1.5% of its net assets each year to support Australian medical research.
Some of the beneficiaries it supports includes include the Bionics Institute, Black Dog Institute, Victor Chang Cardiac Research Institute, Muscular Dystrophy NSW, SpinalCure and more.
It's not just pleasing on the philanthropic side of things, but the dividend yield and the overall investment setup is appealing too.
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Diversified investment portfolio
Hearts & Minds has a high-conviction portfolio of typically global shares with the picks from a select group of fund managers who contribute their best ideas for free.
Some of the portfolio of between 25 to 35 names are chosen at an annual investment conference. The names regularly change each year, but the diversified picks can deliver pleasing overall returns.
Over the last three years to 31 January 2026, its portfolio has returned an average of 12.4%. That's not the biggest return around, but I think the variety of names makes it a worthy addition to a portfolio.
Dividend yield potential
The business has a high level of franking credits and the board of directors is focused on releasing those franking credits to shareholders through "sustainable and growing fully franked dividends".
The high-yield business intends to increase its fully franked dividend by 0.5 cents per share every six months "for the foreseeable future".
Hearts & Minds Investments said that shareholders should expect a fully franked dividend of 9.5 cents to be paid with FY26 half-year result and a total dividend per share of 19.5 cents for FY26 (assuming there is no "sustained period of investment market underperformance")
At the time of writing, the ASX dividend share could provide a grossed-up dividend yield of almost 9.9% including franking credits and 6.9% excluding franking credits.
Considering the business reported that its latest weekly pre-tax net tangible assets (NTA) per share was $3.42 on 13 February 2026, that means it's currently valued at a discount of more than 17%.
This seems like a great time to invest and why it's a sizeable part of the income-focused side of my portfolio.
