I believe the ASX share market is the best place to find passive income opportunities due to the large dividend yields. ASX dividend shares are a great place to hunt for ideas.
When you combine a generous dividend payout ratio with franking credits, you can end up with an impressive dividend yield.
I'm going to highlight two listed investment companies (LICs) in this article, both of which offer impressive dividend yields.
LICs enable investors to invest in a portfolio of shares in a single investment. The structure allows the LIC to turn long-term investment returns into a steady (and rising) payout.
I'm going to talk about two of my favourites.
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PM Capital Global Opportunities Fund Ltd (ASX: PGF)
This LIC targets global shares to generate impressive returns. Its investment focus can change over the years, but currently some of the themes it has invested in include European banks, industrial metals, healthcare, industrials, USA banks, consumer and staples, leisure and entertainment, and housing in Ireland and Spain.
It currently has 40 positions, which I think is ample diversification for a professionally-run portfolio.
Past performance is not a guarantee of future performance, but its portfolio has returned an average of 16.8% per year since December 2013. That level of return has allowed this ASX dividend share to deliver share price growth, a rising dividend and a good dividend yield.
Over the past year, the PM Capital Global Opportunities Fund share price has risen by well over 100%. Its annual dividend per share has been hiked every year over the past decade aside from FY23 when it maintained its payout. That's an impressive record of reliability.
The business intends to hike its annual payout in FY27 by 10% to 16 cents per share. That translates into a grossed-up dividend yield of 6.8%, including franking credits, at the time of writing. I expect the future payouts will be even bigger.
WAM Leaders Ltd (ASX: WLE)
The other ASX dividend share I want to highlight is WAM Leaders, a LIC run by Wilson Asset Management (WAM) that targets large, quality ASX shares.
By being active with its holdings, rather than just passively holding the largest stocks, WAM Leaders has managed to deliver an average return per year of 12.1% since its inception in May 2016, outperforming the ASX share market by an average of close to 3% per year.
Currently, some of its 'overweight' investments are focused around real estate businesses and major property developers.
That investment style, as well as having a good understanding of macroeconomic conditions, has allowed WAM Leaders to hike its annual dividend per share every year since FY17.
Its latest annual dividend per share was 9.6 cents in FY26. That equates to a grossed-up dividend yield of 10.3%, including franking credits, at the time of writing.
