Solaris Australian Equity Income Plus (ASX: SET) Dividend 2026: Franked Income From an Active Equity Vehicle

Quick answer: Solaris Australian Equity Income Plus (ASX: SET) is an actively managed listed investment trust on the ASX that targets franked income from a concentrated portfolio of Australian equities. In 2026, SET continues to distribute partially or fully franked income, making it worth examining for investors who prioritise tax-effective cash flow from Australian shares.

Franked dividends are among the most powerful tools an Australian investor has — and SET is specifically designed to harness them. Unlike a passive index ETF that simply mirrors the S&P/ASX 200, SET is actively managed, meaning the investment team at Solaris Investment Management selects stocks with an explicit focus on generating reliable, tax-effective income. Here is a clear-eyed look at how SET works, what its dividend record looks like in 2026, and whether it suits your income strategy.

What Is Solaris Australian Equity Income Plus (ASX: SET)?

Solaris Australian Equity Income Plus is a listed investment trust (LIT) — sometimes called a listed managed investment scheme — that trades on the Australian Securities Exchange under the ticker SET. It is managed by Solaris Investment Management, a Brisbane-based active equities manager with a long pedigree in Australian institutional funds management.

Unlike an exchange-traded fund (ETF) that passively tracks an index, SET is actively managed. The portfolio team selects a concentrated basket of Australian shares — typically blue-chip dividend payers — with the deliberate goal of generating income that is both high and largely franked. The trust also employs an options overlay strategy (selling covered call options over part of the portfolio) to enhance income further. This is the "Plus" in the name: the additional yield generated from the options premium on top of ordinary dividends.

The trust is structured so that distributions flow through to unitholders with whatever franking credits (tax offsets attached to corporate tax already paid) are generated by the underlying shares. For Australian investors, particularly those in lower or middle tax brackets, franking credits can dramatically improve after-tax returns.

How Franking Credits Work — A Quick Refresher

Before diving into SET's specific dividends, it helps to understand why franking credits matter so much.

When an Australian company pays tax at the corporate rate (currently 30% for large companies, 25% for eligible small companies), it can attach those tax payments to dividends as franking credits. When you receive a franked dividend, the ATO (Australian Taxation Office) treats you as having already paid some or all of the tax on that income.

Worked example: Suppose SET pays a distribution of $0.10 per unit that is 100% franked at the 30% corporate tax rate.

Item	Amount
Cash distribution per unit	$0.10
Grossed-up franking credit (30/70 × $0.10)	$0.0429
Grossed-up dividend (total taxable income)	$0.1429
Tax payable at 32.5% marginal rate	$0.0464
Less: franking credit offset	($0.0429)
Net tax payable	$0.0035

Compare that to an unfranked distribution of $0.10 where the same investor would pay $0.0325 in tax — nearly ten times more. The benefit compounds significantly across a full year of distributions and a larger portfolio.

If your marginal tax rate is lower than 30% (for example, if your taxable income is under the $18,200 tax-free threshold or you are a super fund in pension phase paying 0% tax), franking credits can generate a cash refund from the ATO. This is one of the defining advantages of Australian equity income investing.

Use the Income Tax Calculator to see how different levels of franked income interact with your personal tax rate.

SET's Investment Approach: Active Management With an Options Overlay

Stock Selection

Solaris's team focuses on large and mid-cap Australian companies with strong, sustainable dividend-paying capacity. Think the big four banks (Commonwealth Bank, Westpac, ANZ, NAB), miners like BHP and Rio Tinto, Woolworths, Wesfarmers, and other ASX stalwarts. These are businesses generating consistent free cash flow that is returned to shareholders.

The portfolio is relatively concentrated — typically 30 to 50 holdings — rather than the 200-plus stocks you would find in a broad index fund. Concentration allows the manager to overweight genuine high-yielders without being dragged down by low or no-dividend technology or growth stocks.

The Options Overlay ("Plus")

The "Plus" element refers to the covered call options writing programme. Here's how it works in plain English:

SET holds shares in, say, BHP.
It sells (writes) a call option over those BHP shares to another market participant, giving that buyer the right to purchase the shares at a set price.
In exchange, SET receives a premium — immediately, in cash.
If BHP's price stays below the strike price, the option expires worthless and SET keeps both the shares and the premium income.
If BHP's share price surges above the strike, the shares may be called away, limiting upside but still generating premium income.

This strategy typically adds 1–2% of additional annual yield over and above the underlying dividend yield. The trade-off is a cap on capital growth during strong bull markets. For income-focused investors who value certainty of cash flow over maximum capital appreciation, this is often an acceptable compromise.

Distribution Frequency

SET typically pays distributions quarterly, which suits investors who prefer regular cash flow rather than the semi-annual or annual patterns of some listed investment companies (LICs). Quarterly distributions also allow reinvestment to compound more frequently for those using a distribution reinvestment plan (DRP).

SET's Dividend Record in 2026

While specific distribution amounts for late 2026 are subject to market conditions and the trust's actual performance, Solaris has historically targeted a distribution yield of approximately 5–7% per annum (before franking credits), with distributions largely franked at the corporate tax rate of 30%.

Taking into account franking credits, the grossed-up yield for a 30% taxpayer-equivalent benchmark can realistically reach 7–10% per annum — well above the average term deposit rate and competitive with most other income-oriented Australian equity products.

How to Find SET's Current Distribution Rate

ASX announcements — Search ASX: SET on the ASX website under "Announcements" for the most recent distribution notice.
Solaris website — Solaris publishes distribution histories and tax statements directly.
Your brokerage — Most platforms (CommSec, SelfWealth, Stake, etc.) display distribution history for listed trusts.

Important: Distribution amounts for listed trusts can vary quarter to quarter based on dividends received from underlying holdings, options premium income, and the manager's decision to retain or distribute realised capital gains. Do not assume past distributions will continue at the same rate.

Comparing SET to Other Australian Income Options

Choosing the right income vehicle depends heavily on your tax situation, risk tolerance, and investment horizon. Here is how SET stacks up against common alternatives:

Vehicle	Typical Gross Yield	Franking	Actively Managed	Capital Exposure
ASX: SET (Solaris)	~7–10% grossed up	Yes (partial to full)	Yes	Yes — Australian equities
S&P/ASX 200 ETF (e.g., VAS)	~5–6% grossed up	Yes (partial)	No	Yes — broad market
High-yield savings account	~4–5% (pre-tax)	No	N/A	Nil (cash)
Term deposit (12-month)	~4–5% (pre-tax)	No	N/A	Nil (cash)
Hybrid securities / notes	~5–7% (pre-tax)	Partial	No	Moderate credit risk
Infrastructure LIT/LIC	~4–6% grossed up	Partial	Often yes	Yes — infrastructure assets

Yields are illustrative ranges based on recent market conditions as at mid-2026 and will vary.

SET's edge is the combination of active stock selection, options overlay income, and franking credits — a trifecta that can deliver meaningfully more after-tax cash than cash savings while maintaining liquid, exchange-traded access to the investment. The risk, as always with equities, is that the underlying portfolio can fall in value during a market downturn, reducing both capital and potentially distribution capacity.

Tax Considerations for SET Investors

Trust vs. Company Structure

SET is structured as a trust rather than a company. This is important because trusts cannot retain or "frank" their own earnings in the same way a company does. Instead, SET passes through the franking credits attached to dividends received from its underlying shareholdings. The extent to which distributions are franked depends on the composition of the portfolio and how much of the underlying companies' dividends were franked.

Practically, this means that in any given quarter, SET's distribution may be:

Fully franked — if most income came from fully franked dividends in the portfolio.
Partially franked — if some income came from unfranked sources (options premiums, unfranked dividends from certain companies, or foreign income).
Unfranked — if the distribution was funded primarily from options premium income with no accompanying franking credits.

Always check the distribution statement (or tax statement at year end) to understand the exact franking components before lodging your tax return.

Capital Gains Tax (CGT) Distributions

If SET sells underlying holdings at a profit during the year, realised capital gains can also be distributed to unitholders. These are taxable in your hands but may qualify for the 50% CGT discount if the trust held the asset for more than 12 months. This information is detailed in SET's annual tax statement.

For complex CGT situations, the Capital Gains Tax Calculator on Dolaro can help you estimate your liability before lodging with the ATO.

Super Funds and SMSFs

SET is a popular holding in self-managed super funds (SMSFs) for a reason. A super fund in accumulation phase pays 15% tax — well below the 30% corporate tax rate — meaning it will receive the full franking credit and owe only 15% on the grossed-up dividend. In pension phase, the fund pays 0% tax and can receive the excess franking credit as a cash refund.

This makes fully franked income from vehicles like SET extraordinarily tax-efficient for SMSF investors in pension phase.

Risks to Understand Before Buying SET

No investment is without risk, and income-focused investors sometimes underestimate the downside scenarios. Here are the key risks specific to SET:

1. Market Risk

SET holds Australian equities. If the ASX falls sharply — as it did during COVID-19 in early 2020, losing around 35% in weeks — SET's net asset value (NAV) will fall correspondingly. Capital losses can offset income gains, and distributions may be reduced.

2. Distribution Variability

Distributions are not guaranteed. If Solaris's portfolio companies cut dividends (as many did during COVID), SET's income capacity falls. Similarly, if options premiums compress during low-volatility periods, the "Plus" income shrinks.

3. Concentration Risk

A portfolio of 30–50 stocks is more concentrated than a 200-stock index fund. A large holding that cuts its dividend or suffers a major loss can disproportionately impact SET's performance.

4. Premium/Discount to NAV

As a listed trust, SET can trade at a premium or discount to its underlying NAV. If you buy at a premium and the trust later trades at a discount, you can lose money even if the underlying portfolio is flat. Check the premium/discount regularly via SET's ASX announcements or factsheet.

5. Manager Risk

Active management means the fund's performance depends on the skill of Solaris's investment team. Even experienced managers underperform the index in some periods.

Is SET Right for Your Portfolio?

SET suits investors who:

Prioritise regular income over maximum capital growth.
Are in a moderate to lower tax bracket or hold the investment inside super, maximising the franking credit benefit.
Want active management with a disciplined focus on Australian dividend stocks rather than a passive index product.
Are comfortable with equity-level volatility and do not need the capital stability of cash or term deposits.
Prefer quarterly cash flow rather than annual or semi-annual distributions.

SET is less suitable for:

High-marginal-rate investors who would prefer growth assets sheltered inside a low-tax structure (franking credits become less advantageous when your marginal rate exceeds 30%).
Investors who need guaranteed principal preservation — equities can and do fall.
Investors seeking global diversification — SET is entirely Australian equities.

How to Buy SET on the ASX

SET trades on the ASX like any ordinary share. You can purchase units through any Australian stockbroker or online share trading platform — CommSec, Nabtrade, SelfWealth, Stake, CMC Markets, and others all support it.

Key steps:

Open a brokerage account if you don't already have one.
Search for "SET" in the ASX securities search.
Check the current unit price and the NAV premium/discount (available from SET's latest ASX announcement or Solaris's website).
Place a limit order or market order during ASX trading hours (10:00 am to 4:00 pm AEST on business days).
Ensure your details are registered for distributions — your broker will generally handle this automatically.

Minimum investment is whatever the current unit price is multiplied by the minimum number of units your broker allows (typically 1 unit, though some brokers set a minimum order value of $500).

Frequently Asked Questions

What is the ASX ticker for Solaris Australian Equity Income Plus?

The ASX ticker is SET. You can search for it on any Australian brokerage platform or on the ASX website at asx.com.au.

How often does SET pay distributions?

SET typically pays distributions quarterly — four times per year. Exact payment dates are announced via ASX release and on the Solaris website before each distribution.

Are SET's distributions fully franked?

Not necessarily every time. The franking level varies depending on the income sources in that particular quarter — dividends received from fully franked ASX stocks will carry franking credits, while income from options premiums and any unfranked dividends will not. Check each individual distribution statement for the exact franking percentage.

Can I hold SET in my SMSF?

Yes. SET is a listed trust on the ASX and is eligible for SMSF investment, subject to your fund's investment strategy and the sole purpose test. SMSFs in pension phase in particular can benefit significantly from the franking credits, since excess credits may be refunded in cash.

What is the difference between SET and a standard Australian equity ETF?

A standard Australian equity ETF (like Vanguard's VAS or iShares' IOZ) passively tracks the S&P/ASX 300 or similar index and charges low fees. SET is actively managed, employs an options overlay to boost income, and aims specifically for a higher distribution yield. SET's management fees are higher than passive ETFs, but the targeted income enhancement may justify the cost for income-focused investors.

How does the options overlay affect SET's total return?

The options overlay generates additional premium income, which increases distributions. However, it limits upside capital participation — if the market surges strongly, some of that capital gain is foregone because holdings may be called away or the overlay caps full market participation. Over a full market cycle, the total return (income plus capital) of an options-overlay strategy typically trails a pure equity strategy in strong bull markets but outperforms in flat or mildly negative markets.

Where can I find SET's current NAV?

Solaris publishes estimated NAV figures regularly via ASX announcement. You can also find them on the Solaris website under the SET product page. Compare the current trading price to the latest NAV to determine whether the trust is trading at a premium or discount.

Related Calculators and Guides

Income Tax Calculator — Work out how franked dividends affect your actual tax bill at your marginal rate.
Capital Gains Tax Calculator — Estimate CGT liability on SET distributions that include a capital gains component.
ETF Calculator — Model growth and income projections for your ASX ETF and LIT holdings.
Savings Rate Calculator — See how reinvesting SET's quarterly distributions could accelerate your wealth-building.
Superannuation Calculator — Model the impact of holding high-franked income assets inside super across your career.

Information in this article reflects market conditions and product details as at August 2026. Distribution yields, NAV, and franking levels change regularly — always verify current figures via ASX announcements or the Solaris website before investing.

This article is for general information only and does not constitute financial, tax or legal advice. Individual circumstances vary. Consult a registered tax agent or licensed financial adviser before making decisions based on this information.