WAM ACTIVE LIMITED — Investor Presentation 2012

Nov 27, 2012

WAM Active Limited (WAA) Investor Presentation November 2012

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Executive summary

• 12.5% increase in FY2012 fully franked dividend to 9.0 cents per share

• Annualised FY2012 fully franked dividend yield 8.4%[*]

• Investment Portfolio +10 . 8% for 12 months to 31 October 2012 outperforming the S&P/ASX All Ords Accum by 1.9%

• Total shareholder return (TSR) + 16 . 9% for year to 31 October 2012

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• Based on 22 November 2012 closing price of $1.07

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Investment objectives

• D e li ver a regu ar ncome s ream v a u l i t i f ll y ran f k e d di v id en d s

• P rov id e a pos t ve return w t i i i h l ow vo at l ili ty, a ter ees, over f f most periods of time

• Preserve capital

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Dividend growth

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cents per share
9.0
8.0
7.0
6 . 0
5.0
4.0
3.0
2.0
1 . 0
0.0
2008/09 2009/10 2010/11 2011/12
Fully franked dividends
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Positive returns since inception

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11.9% p.a. investment return since inception
Index re-based
Portfolio +70%
80 since GFC
60
40
20
Market still
0
negative
-20
-40
-60
2007 2008 2009 2010 2011 2012
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WAM Active Ltd - Investment Portfolio (before all expenses, fees and taxes) S&P/ASX All Ordinaries Accumulation Index

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Positive returns since inception

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Since
Performance 1 Year 2 Years 3 Years Inception
as at 31 October 2012 % %pa %pa (Jan-08)
%pa
WAA Investment +10.8% +8.9% +6.4% +11.9%
Portfolio
S&P/ASX All Ordinaries
+8.9% +2.3% +3.5% -2.8%
Accumulation Index
Outperformance +1.9% +6.6% +2.9% +14.7%
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Premium / Discount to NTA

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30%
20%
10%
0%
-10%
-20%
-
30%
2008 2009 2010 2011 2012
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Option issue

• Exercise price: $1.08

• Can exercise at any time up until 12 December 2013

• Options trade on the ASX under the code “WAAO”

• To date 19.9% of issued options have been converted into shares

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Option issue benefits

• Reduction in fixed administrative expense ratio

• Increase in liquidity of WAM Active shares

• Greater market presence – potentially improve coverage by research firms, dealer groups and financial advisers

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Investment process “ Market Driven”

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We utilise our extensive information network in the investment community and exploit mispricings in the market.

These opportunities include:

• initial public offerings

• it l i i

• cap a ra s ngs

• block trades

• o v e r so l d pos iti o n s

• takeovers

• Listed Investment Companies (LIC) discount to net tangible assets (NTA)

• • stocks trading at a discount to their NTA

• earnings momentum / surprise

• short selling

• market themes and trends

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Market Driven strategy

				Equity Exposure	Equity Exposure	Equity Exposure	Equity Exposure
	Financial Year to 31 October 2012		100%	Equity Exposure
			80% 90%
	Annualised turnover of invested equity:	5.9 times
	Number of trades:	1,354	50% 60% 70%
	Individual stocks traded:	177	20% 30% 40%
	Takeovers:	6
			0% 10%	n‐08 r‐08 l‐08 t‐08 n‐09 r‐09 l‐09 t‐09 n‐10 r‐10 l‐10 t‐10 n‐11 r‐11 l‐11 t‐11 n‐12 r‐12 l‐12 t‐12
	Placements:	23
	Short Sales:	15		Ja Ap Ju Oc Ja Ap Ju Oc Ja Ap Ju Oc Ja Ap Ju Oc Ja Ap Ju Oc

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Top 10 stocks as at 31 October 2012

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	Company % Gross Assets	Company % Gross Assets	Company % Gross Assets
	Company % Gross Assets
	CSR CSR Limited 3.0% INA Ingenia Communities Limited 2.9%
	RHG RHG Limited 2.8% BKW Brickworks Limited 2.8%
	ALS Alesco Corporation Limited 2 8% . CCQ Contango Capital Partners Limited 2.7% CYG CoventryGroupLimited 2.6%
	CRZ Carsales.com Limited 2.4% SDG Sunland Group Limited 2.1%
	FLT Flight Centre Limited 2.1%

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Brickworks Limited (BKW)

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Sh are pr ce i
$12.00
$11.50
$11.00
$10.50
$10.00 Commenced Buying
$9.50
Oct‐12 Nov‐12
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• Manufacturer of bricks and pre-cast products

• Idea generated from internal discussions around interest rate sensitive companies

• Our analysis showed capacity in the brick market had reduced significantly

• O ur c h anne l c h ec k s n i di cate d t h e start o a res f id ent a recovery i l

• Catalysts include further interest rate cuts and price increases on products

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RHG Limited (RHG)

Share price

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$1.40
$1.20
79c dividend
$1.00
$0.80 10c dividend 10c dividend
$0.60 Commenced Buying
$0.40
$0.20 6c dividend 4.5c dividend
$0.00
•
Mortgage service provider
• -
Loan book in run off
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• Loan book in run off

• Deep value opportunity

• Started bu y in g in the de p ths of the GFC - December 2008 at $0.13

• We have received fully franked dividends of $1.095 to date

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Market Outlook

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•
Further interest rate cuts
forecast
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•
Lower funding costs and
s l o w r o w t h l eads to
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continued high level of
corporate activity
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•
Recent sharemarket rally -
expansion of price to
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earnings revisions
coming
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Investor communication

• Half yearly investor presentations

• Website – wamfunds.com.au

• Subscribe for weekly emails – includes market update

• Monthly investment update and NTA announcement

• Audio casts – monthly

• � Media – Sky Business, Switzer, CNBC, newspapers, industry magazines � H a lf year y nves or news e l i t l tt ers

• Half yearly results and media release

• Attend and present at industry conferences – ASX, AIA, ASA, AIOFP

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Wilson Asset Management in the commun tyi

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We care deeply about the well-being of the wider community because helping others is part of our culture . Recently , we entered a team into the Goulburn to Sydney Cycle Classic which raised over $80,000 for Odyssey House. We have supported various organisations, some of which are featured below.

All donations are made b y individual staff and our mana g ement com p an y and not the listed entities.

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Questions?

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Disclaimer

This presentation has been prepared for use in conjunction with a verbal presentation and should be read in that context.

Information for the graphs, charts and quoted indices contained in this presentation has been sourced from IRESS Market Technology, WAM Capital Ltd, WAM Research Ltd and WAM Active Ltd unless otherwise stated.

The information in this presentation is only intended for Australian residents.

Th e purpose o f thi s presen a t ti on s o prov i t id e n orma i f ti on on y an l d th e con en s o t t f th e presen a t ti on oes no purpor d t t t o provide investment advice. We strongly suggest that investors consult a financial adviser prior to making any investment decision.

The presentation does not take into account the investment objectives, financial situation or particular needs of any person and should not be used as the basis for makin g investment , financial or other decisions. The information is selective and ma y not be complete or accurate for your particular purposes and should not be construed as a recommendation to invest in any particular investment or security, or Fund offered by Wilson Asset Management.

The information provided in the presentation is given in good faith and is believed to be accurate at the time of compilation. Neither Wilson Asset Management, WAM Capital Ltd, WAM Research Ltd and WAM Active Ltd nor its directors or employees make any representation or warranty as to the accuracy , reliability , timeliness or completeness of the information . To the extent permissible by law, Wilson Asset Management, WAM Capital Ltd, WAM Research Ltd and WAM Active Ltd and its director and employees disclaim all liability (whether arising in contract, tort, negligence or otherwise) for any error, omission, loss or damage (whether direct, indirect, consequential or otherwise).

Performance figures quoted in the report are past performance. Past performance is not an indicator of future performance. Neither Wilson Asset Management, WAM Capital Ltd, WAM Research Ltd and WAM Active Ltd nor its directors or employees guarantee or make any representation as to the performance of the Funds, the maintenance or repayment of capital, the price at which shares may trade or any particular rate of return.

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