WAM RESEARCH LIMITED — Net Asset Value 2014

Jul 13, 2014

AS AT 30 JUNE 2014

Investment Update & Net Tangible Assets Report

==> picture [142 x 105] intentionally omitted <==

Performance

Performance
					Since change in
Performance at 30 June 2014	1 Mth	6 Mths	1 Yr	3 Yrs %pa	investment strategy (Jul-10) %pa
WAX Investment Portfolio*	-0.4%	3.1%	20.5%	18.0%	17.9%
S&P/ASX All Ordinaries Accumulation Index	-1.4%	2.7%	17.6%	9.7%	10.3%
Outperformance	+1.0%	+0.4%	+2.9%	+8.3%	+7.6%

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

Net Tangible Assets (NTA) figures

Net Tangible Assets (NTA) figures
NTA before tax	107.19c
NTA after tax and before tax on unrealised gains	106.11c
NTA after tax
	105.85c

~~*~~ The above figures are after 264,930 options exercised during the month and have not been adjusted for the remaining options on issue.

Market overview

The S&P/ASX All Ordinaries Accumulation Index (‘Index’) fell 1.4% in June to finish the 2014 financial year up 17.6%. The Index is now up a remarkable 42% since its last low in June 2012 driven higher by investors seeking yield as interest rates remain at historical lows. During the month, the Reserve Bank of Australia kept the cash rate at 2.5% with Governor Stevens’ language indicating rates would stay at these levels for a prolonged period. Ahead of the reporting season, numerous retailers downgraded their profit forecasts reflecting tougher trading conditions due to weaker consumer confidence following the May Federal Budget.

Economic data continues to provide evidence of a sustainable recovery in the United States prompting the Federal Reserve to announce last week that its stimulatory bond buying program would be completed by October this year. Although a survey of the members of the central bank have indicated they expect US interest rates will start to rise early in the new calendar year, we expect this will occur sooner.

We maintain our cautious stance towards Australia’s equity market in the near term as reflected by the investment portfolio’s higher than average cash weighting. We are confident that despite prevailing market conditions, opportunities will continue to present themselves and our current cash levels position us well to capitalise on these as they arise.

Priority offer to WAM Research Shareholders in Future Generation Investment Fund

Future Generation Investment Fund Limited was launched recently with the prospectus to invest in the company now available. See further details below.

WAM Research Limited

WAM Research Limited
ASX Code	WAX
Listed	Aug 2003
Gross assets	$151.7m
Market cap	$156.8m
Share price	$1.12
NTA before tax	$1.07
Shares on issue	140,026,673
Options on issue	67,990,228
Fully franked annualised interim dividend (FY2014)	7.5c
Dividendyield	6.7%

Investment objectives

• Provide a rising stream of fully franked dividends

• Achieve a high real rate of return, comprising both income and capital growth within risk parameters acceptable to the Directors

Company overview

WAM Research Limited (ASX: WAX) is a Listed Investment Company managed by Wilson Asset Management Group. Listed in August 2003, WAM Research provides investors with exposure to a diversified portfolio of undervalued growth companies, which are generally smallto-medium sized industrial companies listed on the Australian Securities Exchange.

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

Mark Tobin Equity Analyst

Meredith Hemsley Corporate Affairs

1 of 4

AS AT 30 JUNE 2014

Investment Update & Net Tangible Assets Report

==> picture [142 x 105] intentionally omitted <==

Diversified portfolio

Diversified portfolio
May 2014 Investment Type $m %	June 2014
	$m %
Listed Equities 100.7 66.3	110.7 73.0
Fixed Interest & Cash 51.2 33.7
	41.0 27.0
Gross Assets $151.9m 100.0%
	$151.7m 100.0%
Total shares on issue 139,761,743	140,026,673
Total options on issue 68,255,158	67,990,228

~~*~~ This is after the payment of the 3.75 cents per share fully franked interim dividend and 0.1 cents in tax during the month.

Top holdings

Code	Company	Market Value as % Gross Assets
CBAPA	CBA Perpetual Exc Resale Listed Sec - PERLS V	3.8%
SGH	Slater & Gordon Limited	3.8%
FXJ	Fairfax Media Limited	3.1%
DLX	DuluxGroup Limited	3.1%
AHE	Automotive Holdings Group Limited	2.9%
CSV	CSG Limited	2.6%
MTR	Mantra Group	2.6%
TNE IIN SFW VOC	Technology One Limited iiNet Limited SFG Australia Limited Vocus Communications Limited	2.5% 2.1% 2.1% 2.1%
AAD	Ardent Leisure Group	2.1%
ENE ISD	Energy Developments Limited Isentia Group Limited	2.0% 2.0%
SXL	Southern Cross Media Group Limited	2.0%
VET	Vocation Limited	2.0%
AHD	Amalgamated Holdings Limited	1.9%
EQT CIW IFM	Equity Trustees Limited Clime Investment Management Limited Infomedia Limited	1.8% 1.7% 1.7%

Sector allocation

==> picture [180 x 323] intentionally omitted <==

----- Start of picture text -----

27.0% 25.5%
0.3%
1.3% 14.7%
2.0%
3.2%
4.2%
4.3%
12.0%
5.5%
Consumer Discretionary: 25.5%
Financials: 14.7%
Information Technology: 12.0%
Industrials: 5.5%
Health Care: 4.3%
Telecommunication Services: 4.2%
Materials: 3.2%
Utilities: 2.0%
Consumer Staples: 1.3%
Energy: 0.3%
Cash and Fixed Interest: 27.0%
----- End of picture text -----

2 of 4

Investment Update & Net Tangible Assets Report AS AT 30 JUNE 2014

==> picture [142 x 105] intentionally omitted <==

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.

On 30 April 2014, the Company paid a fully franked interim dividend of 3.75 cents per share. This was an increase of 7.1% on the previous corresponding period.

WAM Research dividends since inception

Cents per share

==> picture [480 x 222] intentionally omitted <==

----- Start of picture text -----

8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Special fully franked dividend Ordinary fully franked dividend
----- End of picture text -----

*Annualised interim dividend

Priority offer to WAM Research Shareholders in Future Generation Investment Fund

Future Generation Investment Fund Limited was launched recently with the prospectus to invest in the company now available. In a first for the Australian market, investors can now gain unprecedented access to Australia’s best fund managers for 0.0% performance fees and 0.0% management fees. As fund managers, and many service providers, will be providing their services on a pro bono basis, this will allow the company to donate 1.0% of assets each year to children’s charities to invest in Australia’s future generation. Where the balance of the forgone fees is greater than the amount paid to charities, the balance will be for the benefit of shareholders. Investors are invited to attend the final presentations about this investment opportunity this week in Brisbane, Sydney and Melbourne. Details below:

Brisbane: Tuesday 15 July 2014, 10am – 11am, Brisbane Convention and Exhibition Centre Sydney: Wednesday 16 July 2014, 10am – 11am, Wesley Conference Centre Melbourne: Friday 18 July 2014, 10am – 11am, Morgans at 401

To RSVP, call 02 9247 6755 or email info@wamfunds.com.au.

For further information including the prospectus and online application form visit www.futuregeninvest.com.au.

3 of 4

Investment Update & Net Tangible Assets Report

AS AT 30 JUNE 2014

==> picture [142 x 105] intentionally omitted <==

Bonus Option Issue

On 28 October 2013, the Company announced a one for two bonus option issue (‘Bonus Option Issue’) to all WAM Research shareholders to acquire ordinary shares in the Company. The options have an exercise price of $1.20 per share and can be exercised at any time on or before 17 June 2015.

As at 30 June 2014, 958,663 options had been exercised for a total consideration of $1,150,396, with the remaining balance of outstanding options being 67,990,228.

4 of 4