Listed investment company (LIC) Global Mining Investment (GMI) expects the average discount of share prices to net tangible assets (NTA) in the sector to decrease over time as more investors will adopt the vehicles as an income play.

"The most important change is the freeing up of the process by which dividends can flow through to shareholders," GMI chairman John Robinson said.

"We are now able to pay dividends subject to meeting a liquidity test, whereas in the past it had been based on profit.

"We generate a lot of our income from realised gains in the portfolio. The actual income received from dividends and the interest on convertibles are a relatively small part of the portfolio, so this change in regulations allows us to draw from realised gains as well."

Robinson was referring to changes made in the Corporations Act last year, which enable LICs to pay out higher dividends by including realised capital gains.

But so far the sector is still trading at a discount of more than 10 per cent to NTA.

"Like a lot of these things, it probably requires a bit of a track record so you can see this is not a flash in the pan, but that this is actually a fundamental change," Robinson said.

"But I expect that over time people would re-rate the LIC sector in recognising it is a yield play as much as it is a growth play."

Tria Investment Partners managing partner Andrew Baker said he doubted LICs would be able to generate more interest in the structure.

"LICs have had their day and are in structural decline," Baker said.

"AFIC (Australian Foundation Investment Company) and Argo, with big established shareholder registers, will probably be survivors as they can generally keep their price within sight of NTA.

"But in general terms the future for tradeable equity exposures, which have been LICs in the past, is clearly ETFs (exchange-traded funds)."

According to data from the Australian Securities Exchange (ASX), LICs lost almost 12 per cent in market capitalisation to $17 billion in the 12 months to July 2011.

The number of LICs also dropped from 62 in July last year to 54 last month.

ETFs on the other hand grew 20.4 per cent in market capitalisation to $4.5 billion, while exchange-traded commodities rose 19 per cent to $731 million.

But Robinson said ETFs did not provide competition to a sector-focused investment company such as GMI.

"For us they are not competitors because there is no ETF that replicates the sort of exposure that GMI provides," he said.

"In other words, you can get ASX resources exposure, but you can't get a global resources exposure through a local ETF."

He also said ETFs appealed to investors who sought a passive exposure, while LICs generally aimed to outperform their benchmarks.