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WAM ACTIVE LIMITED — Interim / Quarterly Report 2012
Jan 12, 2012
66032_rns_2012-01-12_28c488ff-566f-434b-823d-43186f36ff05.pdf
Interim / Quarterly Report
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WAM ACTIVE LIMITED (WAA) ABN 49 126 420 719 INVESTMENT UPDATE & NTA – DECEMBER 2011
WAM Active Limited (WAA) offers investors exposure to an active trading style with the aim of achieving a sound return with a low correlation to traditional markets. Since inception WAA has outperformed the overall sharemarket. WAA’s portfolio (before all fees, costs, taxes and dividends) has increased by 53.5% compared to a decline of 23.9% in the S&P/ASX All Ordinaries Accumulation Index. The investment objectives are to deliver investors a growing income stream in the form of fully franked dividends and to preserve capital in both the short term and long term.
| Performance as at 31 December 2011 |
1 Mth % |
6 Mths % |
Fin Ytd % |
1 Year % |
2 Yrs %pa |
3 Yrs %pa |
Since Inception (Jan-08) %pa |
|---|---|---|---|---|---|---|---|
| WAM Active Limited S&P/ASX All Ordinaries Accumulation Index Outperformance* |
-1.0% -1.6% +0.6% |
+0.3% -9.6% +9.9% |
+0.3% -9.6% +9.9% |
-0.4% -11.4% +11.0% |
+2.9% -4.3% +7.2% |
+19.3% +8.5% +10.8% |
+11.3% -6.6% +17.9% |
*The change in the gross portfolio before all expenses, fees and taxes.
| NTA before tax NTA after tax and before tax on unrealised gains NTA after tax |
107.23c |
|---|---|
| 109.43c* | |
| 108.32c** |
- Includes tax assets of 2.20 cents per share.
**Includes the net effect of 2.20 cents of tax assets and 1.11 cents of deferred tax liabilities.
Market Outlook
The markets finished 2011 with a whimper with the S&P/ASX All Ordinaries Accumulation Index down 1.6% for December and down 11.4% for the calendar year 2011. The RBA cut rates by 0.25% at the start of the month which followed up the Melbourne Day rate cut but this did little to improve investor sentiment with retail stocks underperforming. The current European Sovereign debt crisis continued to weigh on equity markets and investor confidence, as it has done for much of year it, which counteracted any positive feeling from the rate cut domestically. A robust solution still has to be found, despite EU heads of state outlining new/improved measures at a meeting in early December. Thus this issue won’t be far from investors
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Market Outlook (continued)
minds for the first part of 2012 and may continue to weigh on global equity markets generally.
The struggles of Australian retailers were drawn into even sharper focus this month with profit downgrades by Billabong, JB Hi-FI and Kathmandu. This highlights how the broader economy is struggling excluding the mining sector. With half yearly results due in late January and early February, we expect more negative surprises rather than positive from companies reporting. Given the current headwinds facing equity markets and the global economy, we are maintaining higher than average cash levels while continuing to rigorously research for companies that meet our investment criteria.
Dividends
On 30 September 2011, the Company paid a fully franked final dividend of 4.0 cents per share. This brings the full year dividend to 8.0 cent per share fully franked.
The Board is committed to paying an increasing stream of fully franked dividends to shareholders provided the company has sufficient franking credits, and it is within prudent business practices. Dividends are paid on a six-monthly basis. Dividend payments will be made with consideration to cash flow, cash holdings and available franking credits.
Providing the company is deemed solvent by the Board, WAA should always be in a position to pay dividends. As at 31 December 2011 WAA currently has franking credits which allow it to pay a dividend equivalent to 10.7 cents per share.
Portfolio Structure
| As at 30 Nov 2011 | As at 30 Nov 2011 | As at 31 Dec 2011 | As at 31 Dec 2011 | ||
|---|---|---|---|---|---|
| Investment Type | $m % |
$m % |
|||
| Listed Equities | 10.4 | 58.1% | 6.9 | 39.1% | |
| Fixed Interest and Cash | 7.5 | 41.9% | 10.8 | 60.9% | |
| Total Long Portfolio | 17.9 | 100.0% | 17.7 | 100.0% | |
| Total Short Portfolio | (0.2) | (0.3) | |||
| Total Fund Size | $17.7m | $17.4m | |||
| No. | No. | ||||
| Total ordinary shares on issue | 16,176,213 | 16,176,213 |
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Portfolio Structure (continued)
At 31 December 2011 the major securities held in the portfolio were:
| Code | Company | Market Value $ |
Market Value as % Gross Assets |
|---|---|---|---|
| SGI | Signature Capital Investments Limited | 1,448,762 | 8.3% |
| CCQ | Contango Capital Partners Limited | 525,690 | 3.0% |
| MSF | Maryborough Sugar FactoryLimited(The) | 430,215 | 2.5% |
| BSL | Bluescope Steel Limited | 391,838 | 2.2% |
| WBC | Westpac BankingCorporation | 345,000 | 2.0% |
| NAB | National Australia Bank Limited | 343,392 | 2.0% |
| SDG | Sunland GroupLimited | 337,763 | 1.9% |
| NHC | New Hope Corporation Limited | 336,539 | 1.9% |
| RHG | RHG Limited | 302,237 | 1.7% |
| CYG | CoventryGroupLimited | 211,243 | 1.2% |
| MIO | Miclyn Express Offshore Limited | 189,381 | 1.1% |
| BHP | BHP Billiton Limited | 180,705 | 1.0% |
| HHY | Hastings High Yield Fund | 168,669 | 1.0% |
| FMS | Flinders Mines Limited | 168,000 | 1.0% |
| IMFG | IMF (Australia) Ltd 10.25% Sec Red Conv Note | 149,795 | 0.9% |
| EPX | Ethane Pipeline Income Fund | 141,979 | 0.8% |
| FRI | Finbar GroupLimited | 132,750 | 0.8% |
| CLO | Clough Limited | 128,467 | 0.7% |
| TGP | Trafalgar Corporate Group | 124,914 | 0.7% |
| PGA | Photon GroupLimited | 113,563 | 0.6% |
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Portfolio Structure – Asset Allocation
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Long Portfolio Structure - Sector Allocation
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Performance
Set out below is the performance of WAA since listing to 31 December 2011 on a financial year basis. The performance data is before all expenses, fees and taxes and is used as a guide to how the company’s investment portfolio has performed against the S&P/ASX All Ordinaries Accumulation Index which is also a before tax and expenses measure.
| Financial Year | Gross Portfolio |
S&P/ASX All Ordinaries Accumulation Index |
Outperformance |
|---|---|---|---|
| 2007/2008 2008/2009 2009/2010 2010/2011 YTD 2011/2012 |
+2.2% +9.6% +22.7% +11.5% +0.3% |
-15.2% -22.2% +13.8% +12.2% -9.6% |
+17.4% +31.8% +8.9% -0.7% +9.9% |
Monthly Performance Table
| Jan 08 | Feb 08 | Mar 08 | Apr 08 | May 08 | Jun 08 | Jul 08 | |
|---|---|---|---|---|---|---|---|
| Gross Portfolio* | +0.3% | +1.2% | +0.5% | +1.6% | +2.4% | -3.7% | -1.1% |
| All Ords Accum. | -11.2% | +0.3% | -4.1% | +4.6% | +2.5% | -7.3% | -5.2% |
| Aug 08 | Sep 08 | Oct 08 | Nov 08 | Dec 08 | Jan 09 | Feb 09 | |
| Gross Portfolio* | +0.1% | -3.8% | -5.3% | -5.2% | +3.4% | -1.9% | +0.6% |
| All Ords Accum. | +4.0% | -10.6% | -13.9% | -7.2% | -0.1% | -4.9% | -4.3% |
| Mar 09 | Apr 09 | May 09 | Jun 09 | July 09 | Aug 09 | Sep 09 | |
| Gross Portfolio* | +4.5% | +7.6% | +5.0% | +6.2% | +9.6% | +7.5% | +6.2% |
| All Ords Accum. | +8.1% | +6.1% | +2.2% | +3.9% | +7.7% | +6.5% | +6.0% |
| Oct 09 | Nov 09 | Dec 09 | Jan 10 | Feb 10 | Mar 10 | Apr 10 | |
| Gross Portfolio* | +2.1% | +0.3% | +1.0% | -3.6% | +0.0% | +2.9% | +0.4% |
| All Ords Accum. | -1.9% | +1.9% | +3.7% | -5.8% | +1.8% | +5.8% | -1.2% |
| May 10 | Jun 10 | Jul 10 | Aug 10 | Sep 10 | Oct 10 | Nov 10 | |
| Gross Portfolio* | -4.0% | -0.9% | +1.6% | +0.1% | +2.7% | +1.3% | +2.3% |
| All Ords Accum. | -7.6% | -2.6% | +4.2% | -0.7% | +5.0% | +2.2% | -0.7% |
| Dec 10 | Jan 11 | Feb 11 | Mar 11 | Apr 11 | May 11 | Jun 11 | |
| Gross Portfolio* | +3.6% | +0.7% | -0.3% | +0.4% | +2.5% | -1.6% | -2.3% |
| All Ords Accum. | +3.8% | +0.1% | +2.2% | +0.6% | -0.6% | -1.9% | -2.4% |
| Jul 11 | Aug 11 | Sep 11 | Oct 11 | Nov 11 | Dec 11 | Since Inception |
|
| Gross Portfolio* | +0.0% | -1.2% | +0.7% | +2.1% | -0.4% | -1.0% | +53.5% |
| All Ords Accum. | -3.4% | -2.0% | -6.3% | +7.2% | -3.4% | -1.6% | -23.9% |
*The change in the portfolio before all expenses, fees and taxes
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For further information please contact Geoff Wilson or Chris Stott. Level 11, 139 Macquarie Street, Sydney NSW 2000 | GPO Box 4658 Sydney NSW 2001 | ABN 49 126 420 719 Phone 02 9247 6755 | Fax 02 9247 6855 | [email protected] | www.wamfunds.com.au