WAM RESEARCH LIMITED — Net Asset Value 2015

Oct 13, 2015

AS AT 30 SEPTEMBER 2015

Investment Update & Net Tangible Assets Report

Performance

Performance at		Fin			3 Yrs	5 Yrs	Since change in investment strategy
30 September 2015	1 Mth	YTD	6 Mths	1 Yr	%pa	%pa	(Jul-10) %pa
WAX Investment Portfolio* S&P/ASX All	2.8%	7.4%	8.0%	21.4%	24.0%	18.5%	19.5%
Ordinaries	-2.5%	-5.8%	-11.7%	-0.2%	9.3%	6.3%	7.7%
Accumulation Index
Outperformance	+5.3%	+13.2%	+19.7%	+21.6%	+14.7%	+12.2%	11.8%

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

Professional Planner / Zenith Fund Awards 2015

Wilson Asset Management won the Listed Investment Company category at the Professional Planner / Zenith Fund Awards 2015 on Friday 9 October 2015 for the second year in a row. We are delighted to be recognised for our work and would like to thank our shareholders for their ongoing support.

Net Tangible Assets (NTA) figures

The following NTA figures are before the 4.0 cents per share fully franked final dividend due to be paid on 23 October 2015. The shares traded ex dividend on 12 October 2015.

NTA	before tax	117.63c
NTA	after tax and before tax on unrealised gains	117.37c
NTA	after tax	117.25c

Market overview

The poor performance of the Australian equity market continued in September with the S&P/ASX All Ordinaries Accumulation Index falling 2.5%. The first quarter of the 2015-16 financial year was the worst quarter since 2011 with a 5.8% fall. The domestic resources and energy sectors lagged and the banks continued their fall after strong outperformance in recent years.

The Reserve Bank of Australia opted to hold the cash rate steady at its meeting on 6 October 2015. We believe over the next year we will see further reductions to the cash rate. There are growing calls for more interest rate cuts to drive corporate earnings growth and lift consumer confidence given the softness of recent economic data in Australia.

Despite the heightened volatility and recent poor performance in equities, our cash levels will assist us in preserving capital while also providing the flexibility to act on opportunities as they emerge. We have been selectively adding to positions in recent weeks with the share market now 18% off the late April highs.

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WAM Research Limited

ASX Code	WAX
Listed	Aug 2003
Gross assets	$200.7m
Market cap	$208.3m
Share price	$1.26
NTA before tax	$1.18
Shares on issue	165,303,976
Fully franked dividends (FY2015)	8.0c
Dividendyield	6.3%

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

Tobias Yao Equity Analyst

James McNamara Communications Manager

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Investment Update & Net Tangible Assets Report

Diversified portfolio

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Diversified portfolio
August 2015 Investment Type $m %	September 2015
	$m %
Listed Equities $125.0 63.9	$119.3 59.4
Fixed Interest & Cash $70.6 36.1
	$81.4 40.6
Gross Assets $195.6m 100.0
	$200.7m 100.0
Total shares on issue 165,303,976	165,303,976

Top holdings

Code	Company	Market Value $	Market Value as % Gross Assets
ASB	Austal Limited	8,130,247	4.1%
ECX	Eclipx Group Limited	7,716,815	3.8%
SIQ	Smartgroup Corporation Limited	7,014,506	3.5%
IPH	IPH Limited	7,001,513	3.5%
ENE	Energy Developments Limited	6,627,377	3.3%
CSV	CSG Limited	6,041,419	3.0%
AAD	Ardent Leisure Group	5,078,575	2.5%
MTR AHD	Mantra Group Limited Amalgamated Holdings Limited	4,834,504 4,826,264	2.4% 2.4%
RCG	RCG Corp Limited	4,328,632	2.2%
TPM	TPG Telecom Limited	4,182,892	2.1%
GUD	GUD Holdings Limited	4,113,093	2.0%
AHG	Automotive Group Holdings Limited	4,034,317	2.0%
CKF	Collins Foods Limited	3,569,667	1.8%
CCP	Credit Corp Group Limited	3,335,260	1.7%
BLX	Beacon Lighting Group Limited	3,063,566	1.5%
TRS	The Reject Shop Limited	2,927,869	1.5%
SDA	SpeedCast International Limited	2,296,215	1.1%
APE	AP Eagers Limited	2,197,587	1.1%
HSN	Hansen Technologies Limited	2,184,322	1.1%

Sector allocation

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21.6%
40.6%
15.0%
1.0%
1.4% 6.6%
3.3% 6.6%
3.9%
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Consumer Discretionary: 21.6% Industrials: 15.0% Financials: 6.6% Information Technology: 6.6% Telecommunication Services: 3.9% Utilities: 3.3% Consumer Staples: 1.4% Health Care: 1.0% Cash and Fixed Interest: 40.6%

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

WAM Research dividends since inception

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Cents per share
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Ordinary fully franked dividend Special fully franked dividend
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On 24 August 2015, the Company announced a fully franked final dividend of 4.0 cents per share. This brings the full year dividend to 8.0 cents per share, an increase of 6.7% on the previous corresponding period.

The dividend reinvestment plan (DRP) will operate at a 2.5% discount for the final dividend. To participate in the DRP, shareholders should send their DRP Election Form to the Company’s share registrar (Boardroom) no later than 15 October 2015.

Key dividend dates

Ex date: 12 October 2015 Record date: 14 October 2015 Last election date for DRP: 15 October 2015 Payment date: 23 October 2015

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Upcoming investor presentations

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Date	City	Location	Time
Thursday 19 November 2015	Perth	Parmelia Hilton 14 Mill Street	10:00am – 12:00pm
Tuesday 24 November 2015	Sydney	Wesley Centre Auditorium 220 Pitt Street	WAX AGM 10:00am – 10:30am Presentation 11:00am – 12:30pm
Wednesday 25 November 2015	Adelaide	The Playford 120 North Terrace	10:00am – 12:00pm
Thursday 26 November 2015	Melbourne	Rydges Melbourne 186 Exhibition Street	10:00am – 12:00pm
Friday 27 November 2015	Brisbane	Brisbane Convention & Exhibition Centre Cnr Merivale & Glenelg Street South Bank	10:00am – 12:00pm
Monday 30 November 2015	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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