281,750 shares of this high-yield ASX dividend stock pays an income equal to the Age Pension

This business has a very compelling future for dividend payments…

The ASX dividend stock L1 Global Long Short Fund Ltd (ASX: GLS) could be one of the best options for investors wanting a good level of passive income. I'd rather invest in this ASX share rather than rely on the Age Pension.

L1 Global Long Short Fund Ltd is a listed investment company (LIC) which is relatively new to the ASX.

It follows the same investment strategy as the L1 Long Short Fund Ltd (ASX: LSF), which has been listed for more than eight years, but it has a global share focus rather than looking largely evenly at ASX shares and global shares.

For multiple reasons, I think the L1 Global Long Short Fund Ltd is a top pick for retirement (and wealth building).

Numerous Australian dollar notes laid out.

Image source: Getty Images

Good passive dividend income potential

L1 Global Long Short Fund doesn't yet have a long dividend record, but its sibling LIC has demonstrated its desire and ability to grow dividend payouts at a pleasing pace over the last few years, since 2021.

The ASX dividend stock has recently provided guidance that it's going to significantly increase its dividend payouts in FY27, which will help boost the dividend yield.

The LIC has indicated it will increase its annual dividend per share to "at least" 8 cents in the 2027 financial year. That translates to a grossed-up dividend yield of 5.4% at the time of writing, including franking credits.

Impressively, that guided payout represents significant year-over-year growth, and I believe the dividend could grow by another 10% (or more) in FY28 compared to the guided payout in FY27.  

Effective investment strategy

The investment team in charge of this LIC combines valuation (primarily discounted cash flow) with qualitative considerations such as management quality, long-term industry and company structure and business trends to identify attractive investment opportunities.

The fund managers and analysts in charge of this LIC have several thousand company meetings a year, including one-on-one visits with company management, listed and unlisted competitors, customers, suppliers, operational personnel, regulators, consultants, unions and other parties that can help provide a deeper insight.

It's also willing to use short selling, where it bets on share prices going down. That means it can make returns on certain stocks if the share price goes down.

At the end of July 2026, the ASX dividend stock reported that it had delivered a total return of 17.8% since its inception, beating the global share market return of 11.1% in that same timeframe since November 2025.

Since the inception of the specific global long-short strategy, which started in January 2025 and is unlisted, it has returned 58.1% compared to the global share market return of 20.1% in the same time period. Of course, past performance is not a reliable indicator of future returns.

Producing good investment returns can help fund good passive income and capital growth, which is something that the Age Pension can't do.

Diversification

L1 Global Long Short Fund offers investors pleasing diversification.

Its portfolio typically has between 40 to 80 positions across a wide range of sectors and themes, allowing it to make returns in a variety of ways.

The company also provides effective geographic diversification across North America, Europe and Asia Pacific.

While diversification doesn't automatically mean great returns, it can help lower the risk of being too exposed to one particular area. The global investment mandate also means that the ASX dividend stock can search far and wide for opportunities.

How many shares would it take to equal the Age Pension?

The maximum annualised Age Pension that Australians can receive right now is approximately $32,200.

To receive that level of income from L1 Global Long Short Fund, it'd take 402,500 shares if we exclude franking credits and 281,750 shares if we include the franking credits as part of the dividends.

Overall, I'd be excited to own that many shares, though I also think it's a good idea to receive dividends from different sources.

Motley Fool contributor Tristan Harrison has positions in L1 Global Long Short Fund Ltd and L1 Long Short Fund. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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