WAM ACTIVE LIMITED — Interim / Quarterly Report 2018

Jun 12, 2018

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Investment update As at 31 May 2018

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Snapshot

Pre-tax net tangible assets

Gross assets

$1.09 $46.4m

wilsonassetmanagement.com.au ABN 49 126 420 719

Fully franked dividend yield 5.2%

Performance (p.a. since January 2008) 12.8%

WAM Active Limited

ASX code WAA Date of listing Jan 2008 Gross assets $46.4m Market cap $45.9m Share price (WAA) $1.105 Option price (WAAO) $0.005 NTA before tax $1.09 Shares on issue 41,575,290 Options on issue 29,312,744 Annualised fully franked 5.7c interim dividend (FY2018)

Fully franked dividend yield 5.2%

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

Geoff Wilson AO Chairman & Portfolio Manager

Kate Thorley Chief Executive Officer Chris Stott Chief Investment Officer & Portfolio Manager

Matthew Haupt Portfolio Manager Catriona Burns 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.

Defending the current dividend imputation system

The Federal Opposition has proposed changes to the current dividend imputation system that would impact self-funded retirees, older workers and low-income earners. Wilson Asset Management firmly opposes these changes and is calling on the Commonwealth Government and Federal Opposition to maintain the status quo. It is vital to encourage your family and friends to sign our petition to maintain the momentum. Sign the petition here. We are currently consulting with shareholders and industry participants and we will submit the petition and policy paper that will explain the importance of maintaining the current dividend imputation system.

Market overview

The S&P/ASX All Ordinaries Accumulation Index closed up 1.4% in May, with strong quarterly results in the United States translating to increased investor appetite for equities domestically. During the month the federal budget was handed down by Treasurer Scott Morrison, focusing on minor adjustments rather than sweeping reforms.

Globally, US President Donald Trump announced that the US would be withdrawing from the Iran nuclear deal, potentially impacting global oil supply and pushing oil prices to near four-year highs. These highs were short lived with oil prices falling 9.9% as Saudi Arabia and Russia discussed easing production cuts to make up for potential losses from other members, most notably Venezuela and Iran. European political risks resurfaced at the end of May, with the threat of Italy’s withdrawal from the eurozone and a noconfidence vote for the Spanish Prime Minister weighing on equity markets.

Net tangible asset (NTA) figures

NTA before tax	108.62c
NTA after tax and before tax on unrealised gains	107.39c
NTA after tax	107.39c

The above figures are not adjusted for the 29,312,744 options on issue with an exercise price of $1.14.

Performance

									Since
									inception
	Performance at	1	6	Fin	1	3 yrs	5 yrs	10 yrs	%pa
	31 May 2018	mth	mths	YTD	yr	%pa	%pa	%pa	(Jan-08)
	WAA Investment Portfolio*	0.8%	4.3%	13.8%	15.1%	14.1%	13.3%	12.7%	12.8%
	S&P/ASX All Ordinaries Accumulation Index	1.4%	3.1%	10.5%	10.8%	6.4%	9.1%	5.1%	4.0%
	Outperformance	**-0.6% **	**+1.2% **	+3.3%	**+4.3% **	**+7.7% **	**+4.2% **	+7.6%	+8.8%
	UBS Bank Bill Index (Cash)	0.2%	0.9%	1.6%	1.8%	2.0%	2.2%	3.4%	3.6%
	Outperformance	**+0.6% **	+3.4%+12.2%		+13.3%	+12.1%	**+11.1% **	+9.3%	+9.2%

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

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Page 2 of 4

Investment update As at 31 May 2018

wilsonassetmanagement.com.au T +61 2 9247 6755

Growth of $10,000 investment since inception

WAM Active versus the Index and Cash

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$25,000
$20,949
$20,000
$15,638
$15,000
$14,453
$10,000
$5,000
$0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
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 May 2018.

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	Diversified portfolio
April 2018 May 2018 Investment type $m % $m %
Listed equities 31.2 67.6 28.5 61.4
Short portfolio (0.2) (0.5) (1.4) (3.1)
Fixed interest & cash 15.1 32.9 19.3 41.7
Gross assets $46.1 100.0 $46.4 100.0
Total shares on issue 41,575,290 41,575,290

WAM Active options

Your WAM Active options enable you to acquire new shares without paying brokerage fees at the price of $1.14 per share at any time on or before 17 September 2018. The options are currently trading on the ASX under the code WAAO where you have the opportunity to sell or purchase additional options. WAM Active options closed at 0.5 cents on 12 June 2018.

The bonus option issue is an effective way to grow the Company and will deliver benefits to shareholders. As the Company’s size increases, on-market 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. If you have any questions regarding your WAM Active options, please refer to the factsheet or call Alexandra Hopper Irwin on (02) 9247 6755 or email info@wilsonassetmanagement.com.au.

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Page 3 of 4

Investment update As at 31 May 2018

wilsonassetmanagement.com.au T +61 2 9247 6755

Top 20 holdings

Top 20 holdings
Code Company AOG Aveo Group APT Afterpay Touch Group Limited APO APN Outdoor Group Limited ARB ARB Corporation Limited ASB Austal Limited BGA Bega Cheese Limited HT1 HT&E Limited NSC Naos Small Cap Opportunities Company Limited PIA Pengana International Equities Limited PPC Peet Limited	Code Company
	QBE QBE Insurance Group Limited
	REA REA Group Limited
	SUL Super Retail Group Limited
	SVW Seven Group Holdings Limited
	SXL Southern Cross Media Group Limited
	TGG Templeton Global Growth Fund Limited
	TGP 360 Capital Group Limited
	WDE Wealth Defender Equities Limited
	WIC Westoz Investment Company Limited
	WPP WPP Aunz Limited

The top 20 holdings are presented in alphabetical order.

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. The Company’s ability to generate franking credits is dependent upon the receipt of franked dividends from investments and the payment of tax. Since inception, WAM Active has paid 60.0 cents per share in fully franked dividends to shareholders.

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 2017/18
Fully franked dividends Return of capital
Annualised interim dividend
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Page 4 of 4

Investment update As at 31 May 2018

wilsonassetmanagement.com.au T +61 2 9247 6755