WAM ACTIVE LIMITED — Net Asset Value 2014

Apr 8, 2014

AS AT 31 MARCH 2014

Investment Update & Net Tangible Assets Report

Performance

Performance
							Since
Performance at			Fin		3 Yrs	5 Yrs	Inception %pa
31 March 2014	1 Mth	6 Mths	YTD	1 Yr	%pa	%pa	(Jan-08)
WAA Investment Portfolio*	0.6%	6.1%	18.4%	12.5%	12.4%	18.8%	13.5%
S&P/ASX All Ordinaries Accumulation Index Outperformance	0.3% +0.3%	5.7% +0.4%	17.1% +1.3%	13.2% -0.7%	7.7% +4.7%	13.5% +5.3%	1.6% +11.9%
UBS Bank Bill Index Outperformance	0.2% +0.4%	1.3% +4.8%	2.0% +16.4%	2.8% +9.7%	3.7% +8.7%	3.9% +14.9%	4.5% +9.0%

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

Net Tangible Assets (NTA) figures

The following NTA figures are before the payment of the 4.8 cents per share fully franked interim dividend which will be paid on 30 April 2014. The shares will trade ex dividend on 11 April 2014.

NTA before tax 110.33c*
NTA after tax and before tax on unrealised gains 110.44c*
NTA after tax 110.26c

*These figures are after the payment of 3.2 cents in tax during the month.

Market overview

The Australian equity market had a lacklustre performance in March with the S&P/ASX All Ordinaries Accumulation Index (‘Index’) rising 0.3%. After a strong start to the month, markets globally faltered following comments by new US Federal Reserve Chair Janet Yellen that the central bank would continue to slow its bond-buying program and that interest rates could go up by mid-2015. After falling 2.8% in January and then rising 4.8% in February, the Index ended the March quarter up 2.2%.

The All Ordinaries Accumulation Index is now up 17.1% for the financial year to date and up a remarkable 45.2% from its previous low in June 2012. We continue to be concerned that companies’ Price to Earnings (P/E) ratios across a range of sectors are significantly exceeding their historical averages. The average P/E of the top 100 small cap companies is now above pre-GFC levels and technology firms in particular are trading on very high P/E ratios, however the current volatility of US tech stocks indicates the sector is losing its shine.

Our short term outlook for the market remains subdued as some companies appear to be overpriced with limited potential for earnings growth in the immediate term. In line with the Index’s performance for the calendar year to date, we expect the market will end 2014 relatively flat. The market continues to present opportunities and, with a strong cash weighting, the investment portfolio is well positioned to capitalise on such opportunities. Over the medium to longer term, we maintain a bullish view of the equity market contingent on increased economic activity supported by historically low interest rates.

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WAM Active Limited

WAM Active Limited
ASX Code	WAA
Listed	Jan 2008
Gross assets	$38.8m
Market cap	$46.1m
Share price	$1.355
NTA before tax	$1.10
Shares on issue	34,021,523
Fully franked annualised interim dividend (FY2014)	9.6c
Dividend yield	7.1%

Investment objectives

• Deliver a regular income stream via fully franked dividends

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

• Preserve capital

Company overview

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

Investment & Management Team

Geoff Wilson Chairman/Portfolio Manager

Kate Thorley Chief Executive Officer/ Company Secretary

Chris Stott Chief Investment Officer/ Portfolio Manager

Martin Hickson Senior Equity Analyst/Dealer

Matthew Haupt Equity Analyst

Mark Tobin Equity Analyst

Meredith Hemsley Corporate Affairs

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AS AT 31 MARCH 2014

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Investment Update & Net Tangible Assets Report

Diversified portfolio

Diversified portfolio
February 2014 Investment Type $m %	March 2014 $m %
Listed Equities 29.4 71.8	25.5 62.1
Fixed Interest & Cash 11.5 28.2	15.5 37.9
Long Portfolio 40.9 100.0%	41.0 100.0%
Short Portfolio (1.2) (3.0)	(2.2) (5.3)
Gross Assets $39.7m	$38.8m*
Total shares on issue 34,021,523	34,021,523

• This is after the payment of $1,100,006 in tax during the month.

Top holdings

		Market Value as %
Code	Company	Gross Assets
CYA	Century Australia Investments Limited	4.2%
WIC	Westoz Investment CompanyLimited	3.2%
HIL	Hills Limited	3.1%
CSR	CSR Limited	3.1%
IPE	IPE Limited	2.9%
CBAPA	CBA Perpetual Exc Resale Listed Sec - PERLS IV	2.7%
BKW	Brickworks Limited	2.7%
MQA	Macquarie Atlas Roads Group	2.3%
FLT	Flight Centre Travel GroupLimited	2.2%
ANZPB	ANZ Convertible Preference Share - CPS1	2.2%
DJS	David Jones Limited	2.2%
ALL	Aristocrat Leisure Limited	2.1%
CYG	Coventry Group Limited	2.1%
FBU	Fletcher BuildingLimited	2.1%
BLD	Boral Limited	2.0%
HHV	Hunter Hall Global Value Limited	1.9%
SHV	Select Harvests Limited	1.9%
DNA	Donaco International Limited	1.8%
AOG	Aveo GroupLimited	1.7%
IBC	Ironbark Capital Limited	1.6%

Sector allocation

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37.9% 28.0%
-5.3%
11.3%
0.3%
0.3%
0.7% 10.1%
1.8% 9.6%
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Financials 28.0% Consumer Discretionary 11.3% Industrials 10.1% Materials 9.6% Consumer Staples 1.8% Health Care 0.7% Information Technology 0.3% Telecommunication Services 0.3% Short Stock -5.3% Cash and Fixed Interest 37.9%

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Investment Update & Net Tangible Assets Report AS AT 31 MARCH 2014

Dividend growth

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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. Dividends are paid on a six-monthly basis and the dividend reinvestment plan is available to shareholders for both the interim and final dividend.

WAM Active dividends since inception

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Cents per share
12.0
10.0
8.0
6.0
4.0
2.0
0.0
2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
Fully franked dividends
Annualised interim dividend
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On 4 February 2014 the Company announced a fully franked interim dividend of 4.8 cents per share. This represents an annualised fully franked dividend yield of 7.0% based on the last closing price. The interim dividend will be paid on 30 April 2014 and will trade ex on 11 April 2014.

The Dividend Reinvestment Plan (DRP) will operate at a 2.5% discount. To participate in the DRP, shareholders should send their election to the Company’s share registrar (Boardroom Pty Ltd) no later than 17 April 2014.

Key dividend dates

Ex date: 11 April 2014 Record date: 17 April 2014 Last election date for the DRP: 17 April 2014 Payment date: 30 April 2014

WAM submission to FSI – levelling the playing field for retail investors

Wilson Asset Management Group is a strong advocate for all shareholders (retail and wholesale) to be treated equally and equitably when investing in the Australian equity market. On 28 March 2014, we made a submission to the federal government’s Financial System Inquiry recommending that the government ‘level the playing field’ by allowing retail investors to participate in primary equity raisings by ASX listed entities without the use of a prospectus. Currently, wholesale investors are advantaged over retail investors with private placements to wholesale investors raising capital at an average discount of 7.8% over the last ten years. To read the full submission, please go to the What’s New section of our website www.wamfunds.com.au.

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