WAM ACTIVE LIMITED — Interim / Quarterly Report 2017

Dec 11, 2016

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Investment update As at 30 November 2016

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wilsonassetmanagement.com.au ABN 49 126 420 719

Snapshot

Pre-tax net tangible assets

106.07c

Fully franked dividend yield 4.5%

Gross assets $38.6m

Performance (p.a. since January 2008) 12.9%

WAM Active Limited

WAM Active Limited
ASX code	WAA
Listed	Jan 2008
Gross assets	$38.6m
Market cap	$39.6m
Share price (WAA)	$1.11
Option price (WAAO)	$0.052
NTA before tax	$1.06
Shares on issue	35,694,670
Options on issue	34,583,286
Fully franked dividends	5.0c
(FY2016)
Fully franked dividend yield	4.5%

Investment objectives

• Deliver shareholders a regular income stream via fully franked dividends

• Provide a positive return with low volatility, after fees, over most periods of time

• Preserve capital

Wilson Asset Management investment & management team

investment &	management team
Geoff Wilson	Chairman & Portfolio
	Manager
Kate Thorley	Chief Executive Officer
Chris Stott	Chief Investment Officer
	& Portfolio Manager
Matthew Haupt	Portfolio Manager
Martin Hickson	Senior Equity Analyst &
	Dealer
Tobias Yao	Senior Equity Analyst
John Ayoub	Senior Equity Analyst
Oscar Oberg	Senior Equity Analyst

Company overview

WAM Active Limited (ASX: WAA) is a listed investment company managed by Wilson Asset Management. Listed in January 2008, WAM Active provides investors with exposure to an active trading style with the aim of achieving a sound return with a low correlation to traditional markets.

Shareholder Presentations

Thank you to the more than 2,000 shareholders who joined us for our recent Shareholder Presentations. We enjoyed the opportunity to meet with you.

Market overview

The S&P/ASX All Ordinaries Accumulation Index finished the month up 2.5%. Donald Trump’s US presidential election victory was the most significant market event in November with investors globally caught offguard by the poll result. After initially plummeting, equity markets staged strong recoveries as investors focused on the potentially stimulatory impact of Trump’s proposed policies. The Australian share market recorded solid gains to end the month 7.1% higher than the intraday lows on 9 November when Trump was elected. On Melbourne Cup day the RBA left interest rates unchanged with rates likely to be on hold for the majority of 2017. The continued underperformance of the small cap sector accelerated during November. Since-mid August, the S&P/ASX Small Ordinaries Index has now underperformed its larger peers by 9%.

Stock news

In November, winemaker Treasury Wine Estates (ASX: TWE) provided an update at the Company’s Annual General Meeting (AGM). TWE announced it will deliver at least $100 million in cost of goods sold (COGS) savings – up from the previously announced $80 million by FY20. The company also expects cash synergies from the Diageo Wine acquisition of US$35 million, up from US$25 million by FY20. The company has been removing commercial brands and re-shaping the business towards prestige markets under the guidance of CEO Michael Clarke.

Net tangible asset (NTA) figures

Net tangible asset (NTA) figures
NTA before tax	106.07c
NTA after tax and before tax on unrealised gains	104.99c
NTA after tax	104.99c

The above figures are not adjusted for the 34,583,286 options on issue with an exercise price of $1.14.

Performance

Performance
							Since
							Inception
Performance at	1	Fin	6	1	3 Yrs	5 Yrs	%pa
30 November 2016	Mth	YTD	Mths	Yr	%pa	%pa	(Jan-08)
WAA Investment Portfolio*	1.6%	6.8%	6.4%	11.5%	11.8%	13.8%	12.9%
S&P/ASX All Ordinaries	2.5%	5.5%	3.1%	10.0%	5.6%	10.3%	2.7%
Accumulation Index
Outperformance	-0.9%	+1.3%	+3.3%	+1.5%	+6.2%	+3.5%	+10.2%
UBS Bank Bill Index	0.1%	0.8%	0.9%	2.1%	2.4%	2.8%	3.9%
Outperformance	+1.5%	+6.0%	+5.5%	+9.4%	+9.4%	+11.0%	+9.0%

*Investment performance and Index returns are before expenses, fees and taxes.

To access the presentation video and slides, visit wilsonassetmanagement.com.au

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Investment update As at 30 November 2016

Growth of $10,000 investment since inception

WAM Active versus the Index

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$25,000
$17,789
$20,000
$15,000
$13,206
$10,000
$5,000
$0
2008 2009 2010 2011 2012 2013 2014 2015 2016
WAM Active S&P/ASX All Ordinaries Accumulation Index
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Diversified portfolio

		October 2016		November 2016	November 2016
Investment type	$m		%	$m		%
Listed equities	23.3		60.9	28.4		73.5
Short portfolio	(0.9)		(2.4)	(0.6)		(1.6)
Fixed interest & cash	15.8		41.5	10.8		28.1
Gross assets	$38.2m		100.0	$38.6m*		100.0
Total shares on issue		35,693,670		35,694,670**

• This figure is after $162k (0.45 cents per share) in tax paid during the month for FY16.and $1.1k raised from Options exercised during the month.

** During the month, 1,000 Options were exercised.

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Page 3 of 4

Investment update As at 30 November 2016

wilsonassetmanagement.com.au T +61 2 9247 6755

Top 20 holdings

			Market value as
Code	Company	Market value $	% gross assets
HHV	Hunter Hall Global Value Limited	1,983,753	5.1%
CYA	Century Australia Investments Limited	1,663,214	4.3%
AFY	Afterpay Holdings Limited	1,253,843	3.3%
ALQ	ALS Limited	1,146,364	3.0%
A2M	a2 Milk Company Limited	1,057,734	2.7%
TGG	Templeton Global Growth Fund Limited	942,158	2.4%
JBH	JB Hi-Fi Limited	813,100	2.1%
CWY	Cleanaway Waste Management Limited	809,261	2.1%
CGF	Challenger Limited	793,148	2.1%
RMD	ResMed Inc	790,716	2.1%
QBE	QBE Insurance Group	774,606	2.0%
IMD	Imdex Limited	763,096	2.0%
MTR	Mantra Group Limited	744,677	1.9%
BSL	Bluescope Steel Limited	737,854	1.9%
S32	South 32 Limited	733,651	1.9%
CAR	Carsales.com Limited	730,887	1.9%
OZL	Oz Minerals Limited	723,300	1.9%
TWE	Treasury Wine Estates Limited	722,952	1.9%
ORA	Orora Limited	626,577	1.6%
WIC	Westoz Investment Company Limited	610,767	1.6%

Fully franked dividends

The Board is committed to paying an increasing stream of fully franked dividends to shareholders, provided the Company has sufficient profit reserves and franking credits, and it is within prudent business practices. Dividends are usually paid on a six-monthly basis and the dividend reinvestment plan is available to shareholders for both the interim and final dividend. The Company’s ability to generate franking credits is dependent upon the receipt of franked dividends from investments and the payment of tax.

Fully franked dividends since inception

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Cents per share
10.0
8.0
6.0
4.0
2.0
0.0
2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16
Fully franked dividends Return of Capital
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One-for-one option issue

In August 2016, the Company announced a one-for-one bonus option issue to all shareholders at no cost. Options entitle holders to purchase additional ordinary shares in WAM Active at the exercise price of $1.14 at any time on or before 17 September 2018. The options trade on the ASX under the code WAAO. The bonus option issue is an effective way to grow the Company and will deliver benefits to shareholders. As the Company’s size increases, onmarket liquidity for the shares is expected to increase. It will also increase the Company’s relevance in the market, improve the prospect of broker and research coverage, and gain interest from financial planners.

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Investment update As at 30 November 2016