WAM ACTIVE LIMITED — Interim / Quarterly Report 2018

Sep 13, 2017

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Investment update As at 31 August 2017

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Snapshot

Pre-tax net tangible assets

Gross assets

$1.07 $42.1m

wilsonassetmanagement.com.au ABN 49 126 420 719

Fully franked dividend yield

4.8%

Performance (p.a. since January 2008) 12.7%

WAM Active Limited

Market overview

WAM Active Limited
ASX code	WAA
Date of listing	Jan 2008
Gross assets	$42.1m
Market cap	$44.6m
Share price (WAA)	$1.15
Option price (WAAO)	$0.015
NTA before tax	$1.07
Shares on issue	38,810,728
Options on issue	31,672,347
Fully franked dividends	5.5c
(FY2017) Fully franked dividend yield	4.8%

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	Portfolio Manager
Oscar Oberg	Portfolio Manager
Tobias Yao	Senior Equity Analyst
John Ayoub	Senior Equity Analyst
Cooper Rogers	Assistant Dealer

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

The S&P/ASX All Ordinaries Accumulation Index finished 0.8% higher for the month on the back of a mixed reporting season.

Overall, earnings growth was the best in many years although a number of companies fell short of the market’s elevated expectations. Most companies provided subdued outlook statements reflecting current economic conditions. The defensive sectors had one of their worst reporting periods in a decade, led by Telstra (ASX: TLS), which surprised the market with a significant reduction in its dividend guidance for the year ahead.

The rebound of the resources and mining services sectors was a standout, outperforming analysts’ expectations. We were also pleased to see strong performance from the small-cap sector after a difficult 12 months. We believe the current equity market is fairly valued and we are well positioned to take advantage of opportunities as they emerge.

Investor conference call recording and slides

Thank you to those who dialled in to our investor conference call on 6 September 2017. If you would like to listen to the recording and view the corresponding slides, please click here .

Net tangible asset (NTA) figures

	NTA before tax							106.59c
	NTA after tax and before tax		on unrealised gains					106.23c
	NTA after tax						106.21c*
	The above figures are not adjusted	for the 31,672,347 options on issue with an exercise price					of $1.14.
	Performance
								Since
								Inception
	Performance at	1	Fin	6	1	3 Yrs	5 Yrs	%pa
	31 August 2017	Mth	YTD	Mth	Yr	%pa	%pa	(Jan-08)
	WAA Investment Portfolio*	0.6%	2.4%	5.0%	9.4%	11.3%	13.7%	12.7%
	S&P/ASX All Ordinaries Accumulation Index	0.8%	1.0%	2.6%	8.9%	5.4%	10.5%	3.3%
	Outperformance	-0.2%	+1.4%	+2.4%	+0.5%	+5.9%	+3.2%	+9.4%
	UBS Bank Bill Index (Cash)	0.1%	0.3%	0.9%	1.8%	2.2%	2.5%	3.7%
	Outperformance	+0.5%	+2.1%	+4.1%	+7.6%	+9.1%	+11.2%	+9.0%

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

SAVE THE DATE

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

Investment update As at 31 August 2017

Growth of $10,000 investment since inception

WAM Active versus the Index

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$25,000
$20,732
$20,000
$14,293
$15,000
$14,260
$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 31 August 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
		July 2017			August 2017
Investment type	$m		%	$m			%
Listed equities	38.5		90.1	29.1			69.1
Short portfolio	(3.3)		(7.6)	(1.5)			(3.5)
Fixed interest & cash	7.5		17.5	14.5			34.4
Gross assets	$42.7		100.0	$42.1			100.0
Total shares on issue		38,802,828			38,810,728*

*During the month, 7,900 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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Page 3 of 4

Investment update As at 31 August 2017

wilsonassetmanagement.com.au T +61 2 9247 6755

Top 20 holdings

Top 20 holdings
Code Company HHV Hunter Hall Global Value Limited APT Afterpay Touch Group Limited TGG Templeton Global Growth Fund Limited NEC Nine Entertainment Co. Holdings Limited FXJ Fairfax Media Limited SVW Seven Group Holdings Limited EHE Estia Health Limited FLT Flight Centre Travel Group Limited PTM Platinum Asset Management Limited AOG Aveo Group	Code Company
	MND Monadelphous Group Limited
	JHG Janus Henderson Group PLC
	FBU Fletcher Building Limited
	TPM TPG Telecom Limited
	PRG Programmed Maintenance Services Limited
	TGP 360 Capital Group Limited
	CAJ Capitol Health Limited
	HFA HFA Holdings Limited
	WIC Westoz Investment Company 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. Option holders are able to receive the 2.75 cents per share fully franked final dividend on options exercised on or before 11 October 2017. 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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Page 4 of 4

Investment update As at 31 August 2017

wilsonassetmanagement.com.au T +61 2 9247 6755