WAM ACTIVE LIMITED — Net Asset Value 2014

Mar 11, 2014

AS AT 28 FEBRUARY 2014

Investment Update & Net Tangible Assets Report

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Performance

Performance
							Since
Performance at			Fin		3 Yrs	5 Yrs	Inception %pa
28 February 2014	1 Mth	6 Mths	YTD	1 Yr	%pa	%pa	(Jan-08)
WAA Investment Portfolio*	4.3%	9.9%	17.7%	11.8%	12.4%	19.7%	13.6%
S&P/ASX All Ordinaries Accumulation Index Outperformance	4.8% -0.5%	7.9% +2.0%	16.8% +0.9%	10.4% +1.4%	7.9% +4.5%	15.3% +4.4%	1.6% +12.0%
UBS Bank Bill Index Outperformance	0.2% +4.1%	1.3% +8.6%	1.8% +15.9%	2.8% +9.0%	3.8% +8.6%	3.9% +15.8%	4.5% +9.1%

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

WAM Active Limited

WAM Active Limited
ASX Code	WAA
Listed	Jan 2008
Gross assets	$39.7m
Market cap	$44.2m
Share price	$1.30
NTA before tax	$1.13
Shares on issue	34,021,523
Fully franked annualised interim dividend (FY2014)	9.6c
Dividend yield	7.4%

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.

will trade ex dividend on 11 April 2014.
NTA before tax 113.21c
NTA after tax and before tax on unrealised gains 112.51c
NTA after tax 109.85c

Market overview

After a negative start to the 2014 calendar year (falling 2.8% in January), Australian equities rebounded in February with the S&P/ASX All Ordinaries Accumulation Index surging 4.8% by the end of the month. The strong performance was driven largely by a better than expected interim reporting season. Despite the market’s positive reaction to company results announcements, the best reporting season since 2010 by some measures, there has still been no significant improvement to company earnings – a factor we believe is critical to driving the Australian equities market higher.

We are growing increasingly concerned that company Price to Earnings (P/E) ratios are far exceeding historical averages, particularly in the tech sector. Technology companies reported some of the strongest results during reporting season and, as a result, there have been significant re-ratings of some of these stocks. The high P/E trend has emerged amongst companies in other sectors also. We consider the P/Es some companies are trading on to be exceptionally high by historical standards.

We continue to be cautious in our outlook for the market in the short term. Although there have been some small earnings upgrades, these improvements have been driven by companies cutting costs, while revenue growth remains sluggish. With flat earnings and mixed company outlook statements, we anticipate the Australian sharemarket will end the year even. We are more optimistic over the medium to longer-term on the proviso that economic activity increases, driven by low interest rates.

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 28 FEBRUARY 2014

Investment Update & Net Tangible Assets Report

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Diversified portfolio

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|---|---|---|---|---|
|January 2014|February 2014|
|Investment Type|$m|%|$m|%|
|Listed Equities|23.4|59.8|29.4|71.8|
|Fixed Interest & Cash|15.8|40.2|11.5|28.2|
|Long Portfolio|39.2|100.0%|40.9|100.0%|
|Short Portfolio|(1.1)|(2.9)|(1.2)|(3.0)|
|Gross Assets|$38.1m|$39.7m|
|Total shares on issue|34,021,523|34,021,523|

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Top holdings

Sector allocation

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||||||
|---|---|---|---|---|
|Market Value as %|
|Code|Company|Gross Assets|
|CYA|Century Australia Investments Limited|4.2%|
|HIL|Hills Limited|3.5%|
|WIC|Westoz Investment Company Limited|3.2%|28.2%|
|31.2%|
|AOG|Aveo Group Limited (previously FKP Property Group)|3.0%|
|FXJ|Fairfax Media Limited|2.8%|
|IPE|IPE Limited|2.7%|-3.0%|
|CSR|CSR Limited|2.7%|0.2%|
|0.9%|
|BKW|Brickworks Limited|2.5%|
|1.5%|
|BGA|Bega Cheese Limited|2.5%|2.8%|16.8%|
|7.1%|
|MQA|Macquarie Atlas Roads Group|2.4%|
|11.3%|
|ELI|Emerging Leaders Investment Limited|2.3%|
|DJS|David Jones Limited|2.2%|
|Financials 31.2%|
|CYG|Coventry Group Limited|2.2%|
|Industrials 16.8%|
|FLT|Flight Centre Travel Group Limited|2.1%|
|Consumer Discretionary 11.3%|
|HGG|Henderson Group Plc|2.1%|Materials 7.1%|
|TPI|Transpacific Industries Group Limited|2.1%|Consumer Staples 2.8%|
|SUL|Super Retail Group Limited|1.9%|Health Care 1.5%|
|QAN|Qantas Airways Limited|1.9%|Information Technology 0.9%|
|Energy 0.2%|
|HHV|Hunter Hall Global Value Limited|1.9%|
|Short Stock -3.0%|
|SDG|Sunland Group Limited|1.7%|Cash and Fixed Interest 28.2%|

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Investment Update & Net Tangible Assets Report AS AT 28 FEBRUARY 2014

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Dividend growth

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 7.2% 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

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