WAM CAPITAL LIMITED — Net Asset Value 2014

Nov 11, 2014

Investment Update & Net Tangible Assets Report

AS AT 31 OCTOBER 2014

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Performance

								Since
								Inception
Performance at			Fin		3 Yrs	5 Yrs	10 Yrs	%pa
31 October 2014	1 Mth	6 Mths	YTD	1 Yr	%pa	%pa	%pa	(Aug-99)
WAM Investment Portfolio*	0.6%	6.0%	5.1%	7.6%	16.9%	14.0%	13.3%	17.9%
S&P/ASX All
Ordinaries	4.0%	2.8%	3.7%	5.9%	12.9%	7.9%	8.3%	8.5%
Accumulation Index
Outperformance	-3.4%	+3.2%	+1.4%	+1.7%	+4.0%	+6.1%	+5.0%	+9.4%

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

Net Tangible Assets (NTA) figures

The following NTA figures are after the payment of the 6.5 cents per share fully franked final dividend on 17 October 2014.

NTA before tax	176.53c*
NTA after tax and before tax on unrealised gains
	178.41c**
NTA after tax	174.42c**

~~~~ *This figure is after the payment of 1.12 cents in tax during the month.Includes 2.3 cents of tax assets resulting from the merger with Premium Investors.

Market overview

The Australian sharemarket bounced back from an eight-month low during October with the S&P/ASX All Ordinaries Accumulation Index ending the month up 4.0%. The rally was led by financials following their heavy sell-off in September due to regulatory uncertainty and good results coming out of the US quarterly earnings season. Despite ending the month in positive territory, global equity markets saw increased volatility as measured by the VIX Index – a volatility index based on the S&P 500 Index in the US and widely used as a global indicator of market volatility – reaching its highest level since June 2012.

In the US, the S&P 500 Index rallied to close up 2.3%, with news of faster than anticipated economic growth leading to new highs in the sharemarket. Third quarter GDP figures came in at 3.5%, well ahead of market expectations of 3.0%. At the same time, the Fed’s third round of quantitative easing (QE) came to an end. Meanwhile the Bank of Japan surprised markets by announcing an expansion to its asset-buying program – its own form of QE, while equity markets in Europe were weaker across the board in October due to concerns about the prospects of European growth.

We continue to be cautious in our short term view of Australia’s equity market. AGM season, which has commenced, is providing mixed news flow. Industries directly exposed to consumers, such as retail, are continuing to experience tough operating conditions. Our investment portfolio is conservatively positioned, exhibiting higher than average cash levels and as volatility returns to equity markets, we are well positioned to ride through the fluctuations in the market as we have done in past cycles.

WAM Capital Limited

WAM Capital Limited
ASX Code	WAM
Listed	Aug 1999
Gross assets	$621.0m
Market cap	$673.5m
Share price	$1.95*
NTA before tax	$1.77*
Shares on issue	345,405,201
Fully franked dividends (FY2014)	13.0c
Dividendyield	6.7%

*After the payment of the 6.5c fully franked final dividend.

Investment objectives

• Deliver investors a rising stream of fully franked dividends

• Provide capital growth

• Preserve capital

Company overview

WAM Capital Limited (ASX: WAM), one of Australia’s leading Listed Investment Companies, is managed by Wilson Asset Management. Listed in August 1999, WAM provides investors with exposure to an actively managed diversified portfolio of undervalued growth companies, which are generally small-to-medium sized industrial companies listed on the Australian Securities Exchange. WAM also provides exposure to relative value arbitrages and market mispricing opportunities.

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 Senior Equity Analyst

Tobias Yao Equity Analyst

Melanie Shaw Corporate Affairs

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Investment Update & Net Tangible Assets Report

AS AT 31 OCTOBER 2014

Diversified portfolio

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Diversified portfolio
September 2014 Investment Type $m %	October 2014
	$m %
Listed Equities 351.9 54.3	349.1 54.5
Fixed Interest & Cash 296.7 45.7
	291.9 45.5
Long Portfolio 648.6 100.0%	641.0 100.0%
Short Portfolio (13.6) (2.1)
	(20.0) (3.2)
Gross Assets $635.0m
	$621.0m*
Total shares on issue 340,603,969
	345,405,201

~~*~~ This is after payment of the FY2014 6.5 cent fully franked final dividend and 1.12 cents in tax paid during the month.

Top holdings

Sector allocation

Code	Company	Market Value as % Gross Assets
CYA	Century Australia Investments Limited	2.3%
HHV	Hunter Hall Global Value Limited	2.0%		17.0%
SGH	Slater & Gordon Limited	1.9%
CSV HVN AHE	CSG Limited Harvey Norman Holdings Limited Automotive Group Holdings Limited	1.7% 1.6% 1.5%	45.5%			15.6%
GXL	Greencross Limited	1.4%
APO	APN Outdoor Group Limited	1.4%	-3.2%		7.6%
RFG IFM GMA	Retail Food Group Limited Infomedia Limited Genworth Mortgage Insurance Australia Limited	1.2% 1.2% 1.2%	1.3% 1.0% 0.9% 0.6%	7.4% 3.1%
IPE MTR	IPE Limited Mantra Group Limited	1.2% 1.1%	Consumer Discretionary: Financials: 15.6%		17.0%
CTD	Corporate Travel Management Limited	1.1%	Industrials: 7.6%
SRX	Sirtex Medical Limited	1.1%	Information Technology: 7.4% Health Care: 3.1%
AAD	Ardent Leisure Group	1.1%	Telecommunication	Services:		1.3%
WIC ENE	Westoz Investment Company Limited Energy Developments Limited	1.1% 1.1%	Utilities: 1.0% Materials: 0.9% Consumer Staples:	0.6%
AHD VED	Amalgamated Holdings Limited Veda Group Limited	1.1% 1.0%	Short Stock: -3.2% Cash and Fixed Interest:		45.5%

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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. The Company’s ability to generate franking credits is dependent upon the receipt of franked dividends from investments and the payment of tax. 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 Capital dividends since inception

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Cents per share
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Ordinary fully franked dividend Special fully franked dividend Equal access share buy-back
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On 17 October 2014, the Company paid a fully franked final dividend of 6.5 cents per share. This brings the full year fully franked dividend to 13.0 cents per share, an increase of 8.3% on the previous corresponding period.

The Dividend Reinvestment Plan (DRP) for the FY2014 final dividend was partially underwritten by Taylor Collison Limited. The DRP price was $1.8903 per share.

Upcoming investor presentations

Date	City	Location	Time
Wednesday 19 November 2014	Perth	Rydges Perth Cnr King& HaySt	10:00am – 12:00pm
Friday 28 November 2014	Sydney	Wesley Conference Centre Wesley Theatre 220 Pitt Street	WAM AGM 10:30am – 11:00am Presentation 11:30am – 12:30pm
Monday 1 December 2014	Adelaide	National Wine Centre of Australia Cnr Botanic & HackneyRd	10:00am – 12:00pm
Tuesday 2 December 2014	Melbourne	Rydges Hotel 180 Exhibition St	10:00am – 12:00pm
Wednesday 3 December 2014	Brisbane	Brisbane Convention & Exhibition Centre Cnr Merivale & Glenelg Street South Bank	10:00am – 12:00pm
Thursday 4 December 2014	Canberra	Belconnen Premier Inn 110 Benjamin Way Belconnen	10:00am – 12:00pm

If you wish to attend one of our investor presentations, please RSVP by email to info@wamfunds.com.au or call our office on (02) 9247 6755.

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