WAM ACTIVE LIMITED — Net Asset Value 2014

Jan 13, 2014

AS AT 31 DECEMBER 2013

Investment Update & Net Tangible Assets Report

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Performance

Performance
						Since
Performance at 31 December 2013	1 Mth	Fin YTD	1 Yr	3 Yrs %pa	5 Yrs %pa	Inception %pa (Jan-08)
WAA Investment Portfolio*	-0.9%	12.7%	17.9%	10.9%	18.4%	13.2%
S&P/ASX All Ordinaries Accumulation Index	0.9%	14.6%	19.7%	8.0%	12.7%	1.3%
Outperformance	-1.8%	-1.9%	-1.8%	+2.9%	+5.7%	+11.9%
UBS Bank Bill Index	0.2%	1.3%	2.9%	3.9%	4.0%	4.6%
Outperformance	-1.1%	+11.4%	+15.0%	+7.0%	+14.4%	+8.6%

WAM Active Limited

ASX Code	WAA
Listed	Jan 2008
Gross assets	$38.2m
Market cap	$41.5m
Share price	$1.22
NTA before tax	$1.09
Shares on issue	34,021,523
Fully franked dividends (FY2013)	9.5c
Dividend yield	7.7%

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

Investment objectives

Net Tangible Assets (NTA) figures

Net Tangible Assets (NTA) figures
NTA before tax 109.36c
NTA after tax and before tax on unrealised gains 110.17c*
NTA after tax 107.29c**

*Includes tax assets of 0.81 cents per share.

**Includes the net effect of 0.81 cents of tax assets and 2.88 cents of deferred tax liabilities. The above figures are after 1,072,738 options exercised during the month.

Market overview

After the market’s poor start to December, the forecast ‘Christmas Rally’ bore out with the S&P/ASX All Ordinaries Accumulation Index (‘Index’) closing up 0.9% for the month. The market’s December gains added to its overall strong performance in calendar year 2013 with the Index up 19.7% for the year. The 2013 calendar year marked the Index’s biggest one year rise since calendar year 2009.

In December, local and international markets maintained their strong appetite for Initial Public Offerings (‘IPOs’) with 33 companies listing on the Australian Securities Exchange (‘ASX’) raising $18.5 billion. A total of 61 companies floated on the ASX in calendar year 2013 to raise a total of $56.9 billion - an increase of 17.8% on the previous year. We expect that the surge in IPOs will be followed by an increase in corporate Merger and Acquisition activity in Australia in 2014. Our forecast is contingent on clear signals that economic activity is picking up and so providing company boards with greater confidence in the underlying strength of their businesses.

We remain quite cautious in our outlook for the year ahead and anticipate a more subdued performance for Australian and global equity markets. The main reason for this view is that over the last 12 to 18 months company price to earnings (P/E) multiples have expanded significantly while earnings growth has remained anaemic. We will be more positive in our outlook for the market once we start to see a growth in earnings – a thematic we will be watching carefully during next month’s reporting season.

• 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 DECEMBER 2013

Investment Update & Net Tangible Assets Report

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Diversified portfolio

Diversified portfolio
November 2013 Investment Type $m %	December 2013
	$m %
Listed Equities 28.9 76.4	24.7 64.0
Fixed Interest & Cash 8.9 23.6
	13.9 36.0
Long Portfolio 37.8 100.0%
	38.6 100.0%
Short Portfolio (0.4) (1.0)
	(0.4) (1.0)
Gross Assets $37.4m	$38.2m
Total shares on issue 32,948,785
	34,021,523
Total options on issue 1,377,163
	-

Top holdings

Sector allocation

		Market Value as %
Code	Company	Gross Assets
AOG	Aveo Group Limited (formerly FKP Property Group)	6.4%
CYA	CenturyAustralia Investments Limited	3.9%
WIC MQG	Westoz Investment Company Limited Macquarie Group Limited	3.3% 2.9%	36.0%	31.7%
IPE	ING Private EquityAccess Limited	2.6%
HIL	Hills Holdings Limited	2.5%	-1.0%
ELI	EmergingLeaders Investments Limited	2.4%	0.1%
BKW CSR CYG	Brickworks Limited CSR Limited CoventryGroupLimited	2.4% 2.2% 2.1%	8.2% 4.5% 3.1% 1.5% 1.0%	13.9%
MQA	Macquarie Atlas Roads Group	2.1%
JBH	JB Hi-Fi Limited	2.1%	Financials: 31.7%
DJS	David Jones Limited	2.0%	Industrials: 13.9%
TPI	Transpacific Industries GroupLimited	2.0%	Consumer Discretionary: 8.2%
MYR	Myer Holdings Limited	2.0%	Materials: 4.5%
MCS	McAleese Limited	1.7%	Consumer Staples: 3.1% Information Technology: 1.5%
IBC	Ironbark Capital Limited	1.6%	Health Care: 1.0%
WCB	Warrnambool Cheese & Butter Factory Co.Hold. Limited	1.6%	Energy: 0.1%
SDG	Sunland GroupLimited	1.5%	Short stock: -1.0%
HHV	Hunter Hall Global Value Limited	1.4%	Cash and Fixed Interest: 36.0%

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Investment Update & Net Tangible Assets Report AS AT 31 DECEMBER 2013

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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
10.0
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 2012/13
Fully franked dividends
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On 4 October 2013, the Company paid a fully franked final dividend of 4.75 cents per share, an increase of 5.6% on the previous corresponding period. The final dividend brings the total dividend for FY2013 to 9.5 cents per share and represents a fully franked annual dividend yield of 7.6%, based on the last closing price.

$17.3m raised through Bonus Option Issue

The Company raised a total of $17,285,962 through the one-for-one Bonus Option Issue announced on 4 May 2012. These options expired on 12 December 2013 with 16,005,520 options (98.1%) exercised.

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