WAM ACTIVE LIMITED — Interim / Quarterly Report 2018

Oct 12, 2017

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Investment update As at 30 September 2017

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Snapshot

Pre-tax net tangible assets

Gross assets

$1.07 $42.5m

wilsonassetmanagement.com.au ABN 49 126 420 719

Fully franked dividend yield 4.7%

Performance (p.a. since January 2008) 12.6%

WAM Active Limited

Market overview

WAM Active Limited
ASX code	WAA
Date of listing	Jan 2008
Gross assets	$42.5m
Market cap	$45.2m
Share price (WAA)	$1.16
Option price (WAAO)	$0.013
NTA before tax Shares on issue Options on issue	$1.07 38,923,872 31,559,203
Fully franked dividends	5.5c
(FY2017) Fully franked dividend yield	4.7%

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 Kate Thorley	Chairman & Portfolio Manager Chief Executive Officer
Chris Stott	Chief Investment Officer
	& Portfolio Manager
Matthew Haupt	Portfolio Manager
Martin Hickson	Portfolio Manager
Oscar Oberg	Portfolio Manager
Tobias Yao	Senior Equity Analyst
John Ayoub	Senior Equity Analyst
Cooper Rogers	Assistant Dealer

The S&P/ASX All Ordinaries Accumulation Index closed relatively flat for the month.

Minutes from the Reserve Bank of Australia (RBA) indicated reduced demand for steel production in China would weigh on the iron ore price. Evidence of this was a fall of almost 20% in the iron ore price in September. During the month, the RBA Assistant Governor (Financial System) Michele Bullock said the central bank would continue to consider the heightened level of household debt in monetary policy decision-making, reaffirming our view that interest rates will remain on hold in the short term.

Globally, the US Federal Reserve announced it would start to unwind its balance sheet and indicated another rate increase before the end of the year was possible. US President Trump announced a simplified plan to cut corporate taxes that would reduce the corporate tax rate from 35% to 20% and eliminate tax on foreign profits.

November 2017 Shareholder Presentations

We are pleased to invite you to our November 2017 Shareholder Presentations. We will discuss our listed investment companies, investment themes and trends, investment case studies, market outlook and making a difference initiatives. To RSVP, click here .

Net tangible asset (NTA) figures

The following NTA figures are before the 2.75 cents per share fully franked final dividend due to be paid on 27 October 2017. The shares will trade exdividend on 17 October 2017.

NTA before tax	107.09c
NTA after tax and before tax on unrealised gains	106.80c
NTA after tax	106.78c
The above figures are not adjusted for the 31,559,203 options on issue with an exercise price of $1.14.

Performance

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 2017

Adelaide 20 November Perth 21 November Toowoomba 23 November Brisbane 24 November Hobart 27 November Canberra 28 November Sydney (AGM) 29 November Melbourne 30 November

	Performance
								Since
								Inception
	Performance at	1	Fin	6	1	3 Yrs	5 Yrs	%pa
	30 September 2017	Mth	YTD	Mth	Yr	%pa	%pa	(Jan-08)
	WAA Investment Portfolio*	0.7%	3.0%	4.9%	8.6%	12.7%	13.5%	12.6%
	S&P/ASX All Ordinaries Accumulation Index	0.1%	1.0%	-0.5%	8.5%	7.3%	10. 1%	3.3%
	Outperformance	+0.6%	+2.0%	+5.4%	+0.1%	+5.4%	+3.4%	+9.3%
	UBS Bank Bill Index (Cash)	0.1%	0.4%	0.9%	1.8%	2.1%	2.4%	3.7%
	Outperformance	+0.6%	+2.6%	+4.0%	+6.8%	+10.6%	+11.1%	+8.9%

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

RESERVE YOUR PLACE NOW

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wilsonassetmanagement.com.au Page 2 of 4 T +61 2 9247 6755

Investment update As at 30 September 2017

Growth of $10,000 investment since inception

WAM Active versus the Index

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$25,000
$20,912
$20,000
$14,300
$15,000
$14,280
$10,000
$5,000
$0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
WAM Active (ASX: WAA) S&P/ASX All Ordinaries Accumulation Index UBS Bank Bill Index
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Notes:

1. The above graph reflects the period from inception in January 2008 to 30 September 2017.

2. WAM Active’s performance is calculated using the closing daily share price in Australian dollars and assumes all dividends are reinvested.

3. The S&P/ASX All Ordinaries Accumulation Index and the UBS Bank Bill Index have been chosen for comparison purposes only. The graph is not intended to be an indication of future performance of any asset class, index or the WAM Active portfolio.

Diversified portfolio

Diversified portfolio
		August 2017			September 2017
Investment type	$m		%	$m			%
Listed equities	29.1		69.1	23.8			56.1
Short portfolio	(1.5)		(3.5)	(0.8)			(2.1)
Fixed interest & cash	14.5		34.4	19.5			46.0
Gross assets	$42.1		100.0	$42.5			100.0
Total shares on issue		38,810,728			38,923,872*

*During the month, 113,144 options were exercised and allotted.

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 September 2017

wilsonassetmanagement.com.au T +61 2 9247 6755

Top 20 holdings

Top 20 holdings
Code Company HHV Hunter Hall Global Value Limited NEC Nine Entertainment Co. Holdings Limited SVW Seven Group Holdings Limited TGG Templeton Global Growth Fund Limited FXJ Fairfax Media Limited FLT Flight Centre Travel Group Limited EHE Estia Health Limited MMS McMillan Shakespeare Limited PTM Platinum Asset Management Limited HFA HFA Holdings Limited	Code Company
	BLD Boral Limited
	AOG Aveo Group
	PRG Programmed Maintenance Services Limited
	AGF AMP Capital China Growth Fund
	TGP 360 Capital Group Limited
	WDE Wealth Defender Equities Limited
	CAJ Capitol Health Limited
	WIC Westoz Investment Company Limited
	CTN Contango Microcap Limited
	PIC Perpetual Equity Investment Company Limited

Fully franked dividends

On 3 August 2017, the Company announced a fully franked final dividend of 2.75 cents per share, bringing the full year fully franked dividend to 5.5 cents per share. The dividend reinvestment plan (DRP) will operate at a 2.5% discount for the final dividend.

Key dividend dates Dividend ex-date 17 October 2017 Record date 18 October 2017 Last election date for DRP 20 October 2017 Payment date 27 October 2017

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 2016/17
Fully franked dividends Return of capital
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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. The Company’s ability to generate franking credits is dependent upon the receipt of franked dividends from investments and the payment of tax.

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Investment update As at 30 September 2017

wilsonassetmanagement.com.au T +61 2 9247 6755