WAM ACTIVE LIMITED — Fund Information / Factsheet 2017

May 7, 2017

2 May 2017

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Dear fellow optionholder,

Exercise your options today to receive the fully franked interim dividend

As an optionholder, you are entitled to receive the 2.75 cents per share fully franked interim dividend on options exercised on or before Thursday 11 May 2017 . The fully franked interim dividend will be paid on 26 May 2017.

Your options offer you the opportunity to receive the interim dividend and increase your holding of WAM Active shares without incurring brokerage fees.

On Monday 1 May 2017, WAM Active shares closed at the option exercise price of $1.14 and WAM Active options (ASX: WAAO) closed at 1.4 cents.

If you would like to exercise your options, simply process your payment with BPAY or send a cheque with the form and reply paid envelope mailed to you on 9 March 2017.

Options can be difficult to understand, so we have enclosed a brief factsheet. Wilson Asset Management Portfolio Manager Matthew Haupt has also explained options in two short videos, available on our website.

We will endeavour to call all optionholders in the coming days. If you have any further queries please call Alexandra Hopper on (02) 9247 6755 or email info@wilsonassetmanagement.com.au.

Yours sincerely,

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Geoff Wilson Chairman WAM Active Limited

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wilsonassetmanagement.com.au Telephone. + 61 2 9247 6755 Fax. +61 2 9247 6855

info@wilsonassetmanagement.com.au Level 11, 139 Macquarie Street Sydney NSW 2000 Australia

ABN 49 126 420 719

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LIC options explained

Many listed investment companies (LICs) issue bonus options to shareholders giving optionholders various benefits, including the opportunity to buy shares at a discount. This fact sheet explains the key features and benefits of LIC options.

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Key terms

Bonus option issue

Overview

Options give the optionholder the right, but not the obligation, to buy shares in the LIC at a fixed price until they expire. If the share price increases above the option exercise price optionholders have the opportunity to acquire new shares at a discount.

The issue of free options to shareholders by a company. A company may issue bonus options when it lists on the ASX (initial public offering) or once it is trading.

Optionholders have two main choices before their options expire:

1 2 Exercise some or all Sell some or all options If optionholders take no options for the exercise for a profit. action, their options will price and be issued new simply expire.

Exercise some or all options for the exercise price and be issued new shares in the LIC.

Exercise price

The price shares can be purchased when an option is exercised. Sometimes called the strike price.

Expiry date

The last day to exercise options.

In the money

Buy shares at a discount

Example:

If shares are trading on the ASX above the exercise price:

Optionholders can exercise their options and be issued new shares in the company at a discount to the current market price.

If shares are trading on the ASX below the option exercise price:

Optionholders can choose not to exercise their options and instead buy additional shares on market at less than the exercise price.

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Receive shares for
20� less than
their current price
$1.30
$1.10
Share price Exercise price
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Share price is below
the exercise price -
do not exercise
$1.10
$1.00
Share price Exercise price
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A phrase used when the share price of the underlying shares is higher than the exercise price of the option.

Option price

The price options are trading at on the ASX.

Underlying shares

The company shares or securities over which the options are issued. Options can be exercised to receive additional underlying shares.

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Benefits

Aquire shares at a discount

Until the time the options expire, optionholders can exercise options to receive shares in the company for a fixed price (the exercise price). If the exercise price is lower than the current price of the underlying shares, optionholders acquire shares at a discount.

Receive dividends

If optionholders exercise their options before the record date for dividends, they are entitled to receive any announced dividends for each option exercised. This assumes the shares received from the exercise of options are held on the dividend record date.

No brokerage

Unlike buying shares trading on the ASX, exercising options allows optionholders to acquire new share without paying brokerage.

Sell options for a gain

As options trade on the ASX, optionholders can sell their options for a profit. Options are issued at no cost to the option holder.

Grow assets

Issuing options grows the assets of the LIC. As the company’s size increases, the on-market liquidity for its shares can increase. If the exercise price is at a premium to its net tangible assets (NTA), the exercise of options is NTA accretive.

Motivate the manager

Options incentivise the manager of the LIC to do all they can to increase the share price above the exercise price, for example, by delivering strong portfolio performance. If the share price rises above the exercise price, more optionholders are likely to exercise their options, increasing the total assets of the LIC and the fees payable to the manager.

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Flexibility

Optionholders have maximum flexibility and can exercise, sell or hold their options in any combination until they expire.

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If you would like further information about LIC options, please contact Alexandra Hopper.

(02) 9247 6755 | info@wilsonassetmanagement.com.au wilsonassetmanagement.com.au

Disclaimer: The information provided in this document is general only. It does not take into account the investment objectives, financial situation or particular needs of any person and may not be appropriate for your requirements. We strongly suggest that investors consult a financial adviser prior to making any investment decision.