WAM ACTIVE LIMITED

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26 February 2009

MEDIA RELEASE

WAM ACTIVE LIMITED RESULTS SUMMARY
FOR THE HALF YEAR TO 31 DECEMBER 2008
• Loss before tax was $1.89m
• Loss after tax was $1.27m
• Pre tax net tangible assets was 91.83c a share
• After tax net tangible assets was 91.19c a share

WAM Active Limited (WAA) today announced an operating loss before tax for the six months to 31 December 2008 of $1,888,959, and an after tax loss of $1,268,183. This was a result of the decline in the value of the portfolio. During the period the gross value of the portfolio decreased by 11.5% while the All Ordinaries Accumulation Index fell 29.7%. In the twelve months to 31 December 2008 WAM Active’s portfolio declined 9.5% and outperformed the All Ordinaries Accumulation Index by 30.9%.

As at 31 December 2008, 70.9% of the portfolio was held in cash and fixed interest while 29.1% was invested in equities. Top contributors for the period included Everest Financial Group Limited (EFG), Just Group Limited (JST) and Transfield Services Limited (TSE). The stocks that detracted from performance include Macquarie Group Limited (MQG), National Australia Bank Limited (NAB) and Australand Property Group (ALZ).

PORTFOLIO STRATEGY

Currently our main focus is on capital preservation while taking trading opportunities as they present themselves. The majority of our portfolio was held in cash while we actively traded the equity portion, which turned over 12.9 times. Over the last six months the buying of financials that appeared oversold has not been rewarding. The trading of capital raisings continues to provide positive returns as the size of the share price discounts have increased. We are currently looking for areas of exceptional value with low risk. One area we are closely analysing is companies trading at a discount to cash. This has lead us to buy positions in Everest Financial Group Limited (EFG), Progen Pharmaceuticals Limited (PGL) and RHG Limited (RHG).

Our belief is that this current market shake out is and will provide some excellent opportunities over the next 12 months, particularly in the small and mid capitalised arena. Our trading strategy has been centred on buying discount to assets, trading capital raisings or oversold positions and looking for short selling opportunities.

During the six months we maintained our cash levels even though in that period trading turnover was $48.1m or 357.3% of assets. As at 30 June 2008, 78.1% of the portfolio was held in cash and as at 31 December 2008 70.9% was held in cash.

MARKET OUTLOOK

Since listing in January 2008 the benchmark All Ordinaries Index has fallen a staggering 46.6% (as at the date of writing 25 February 2009). The ongoing decline in the equity market is reflective of the collapse in the global economy. Technically Japan is in depression, many smaller European countries are defaulting on debt obligations, while the world’s largest economy, the USA, is experiencing its worst recession since the 1930’s. Australia’s economy has, to date, outperformed the developed world. We would expect the domestic economy to slide into recession during 2009 as commodity and property prices

decline. However, given the domestic banking sector is in relatively better health than the USA and European equivalents. We would expect the domestic recession to be milder than elsewhere.

The severity of the current bear market has reduced WAM Active’s trading opportunities. There have been virtually no initial public offerings while secondary placements, have in the main, delivered modest returns. In this environment we have maintained a high cash position and concentrated on buying stocks that are trading below net asset backing and in some cases, cash backing.

Until economic outlook becomes clearer we will be selective in our investments and look to preserve capital.

NET ASSET BACKING

The net tangible asset backing (NTA) on listing in January 2008 was $0.984 per share.

Below is a table of the company’s position as at 31 December 2008[^] :

NTA before tax payable and after tax assets	91.83c
NTA after tax and before tax on unrealised gains	91.83c
NTA after tax	91.19c

^ The figures above are not diluted for options on issue.

DIVIDEND

There was no dividend declared as the Company made a loss for the period.

The board is committed to paying an increasing stream of fully franked dividends to shareholders over time. Any amounts paid are at the director’s discretion and will be governed by the Company having sufficient profits and prudent business practices.

PORTFOLIO STRUCTURE

PORTFOLIO STRUCTURE
	As at 31 December 2008
Investment Type	$m	%
Listed Equities	3.92	29.1%
Fixed Interest and Cash	9.54	70.9%
Total Long Portfolio	13.46	100.0%

Total Short Portfolio	-	-
	No.
Total no. of ord shares on issue	15,400,101
Total no. of options on issue	15,400,100

At 31 December 2008 the major securities held in the portfolio were:

CODE	COMPANY	MARKET VALUE as % of Long Portfolio	MARKET VALUE as % of Gross Assets
ASX	ASX Limited	17.9%	5.2%
EFG	Everest Financial Group Limited	12.1%	3.5%
NAB	National Australia Bank Limited	11.3%	3.3%
WBC	Westpac Banking Corporation	8.6%	2.5%
QBE	QBE Insurance Group Limited	7.7%	2.2%
CBA	Commonwealth Bank of Australia	6.3%	1.8%
TTS	Tatts Group Limited	5.1%	1.5%
AMP	AMP Limited	4.0%	1.2%
TOL	Toll Holdings Limited	3.6%	1.0%
PGL	Progen Pharmaceuticals Limited	3.5%	1.0%
BEN	Bendigo and Adelaide Bank Limited	3.4%	1.0%
ANZPB	ANZ Banking Group Limited Conv Prefs	2.7%	0.8%
AMM	Amcom Telecommunications Limited	2.1%	0.6%
MVU	MatrixView Limited	1.9%	0.6%

- PORTFOLIO STRUCTURE ASSET ALLOCATION

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- LONG PORTFOLIO STRUCTURE SECTOR ALLOCATION

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For further information please contact Mr Geoff Wilson or Mr Matthew Kidman on (02) 9247 6755

AI assistant

WAM ACTIVE LIMITED Interim / Quarterly Report 2009

66032_rns_2009-02-25_f6d79d25-a781-45a3-8c16-00060a3918a7.pdf

26 February 2009

MEDIA RELEASE