WAM RESEARCH LIMITED — Net Asset Value 2016

May 12, 2016

AS AT 30 APRIL 2016

Investment Update & Net Tangible Assets Report

Performance

							Since change in investment
Performance at			Fin		3 Yrs	5 Yrs	strategy (Jul-10)
30 April 2016	1 Mth	6 Mths	YTD	1 Yr	%pa	%pa	%pa
WAX Investment Portfolio*	0.0%	5.0%	16.8%	16.4%	19.1%	17.7%	19.1%
S&P/ASX All
Ordinaries	3.2%	2.8%	1.3%	-3.7%	5.4%	6.2%	8.2%
Accumulation Index
Outperformance	-3.2%	+2.2%	+15.5%	+20.1%	+13.7%	+11.5%	+10.9%

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

Net Tangible Assets (NTA) figures

The following NTA figures are after the 4.25 cents per share fully franked interim dividend paid on 29 April 2016.

interim dividend paid on 29 April 2016.
NTA before tax
	116.28c
NTA after tax and before tax on unrealised gains	114.77c*
NTA after tax
	114.66c*

~~*~~ These figures are after the payment of $98k (0.06 cents per share) in tax during the month.

Market overview

Global equity markets continued to rally in April, led higher by resource stocks, which rebounded on the back of the strong recovery in commodity prices. The S&P/ASX All Ordinaries Accumulation Index rose 3.2% for the month with gains heavily weighted towards the mining sector. Towards the end of April, the share market was caught by surprise when the Australian Bureau of Statistics reported the weakest core inflation rate since 1983. In response, the Australian dollar fell sharply and in early May the Reserve Bank of Australia (RBA) reduced the cash rate by a further 0.25%.

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WAM Research Limited

WAM Research Limited
ASX Code	WAX
Listed	Aug 2003
Gross assets	$208.9m
Market cap	$229.9m
Share price	$1.32
NTA before tax	$1.16
Shares on issue	174,169,283
Fully franked annualised interim dividend (FY2016)	8.5c
Dividendyield	6.4%

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

Currently, Australia’s economy is being influenced by a range of factors including uncertainty created by the imminent federal election and unseasonably warm weather along the eastern seaboard – a negative for apparel retailers. Other factors including fragile consumer confidence and a slow-down in the housing market, in part due to the banks tightening their lending criteria, are also weighing on the economy. However, we anticipate the RBA’s recent decision to cut official interest rates by 25 basis points will have a stimulatory impact on the economy. While rates remain low by historical standards, the central bank has scope to reduce rates further to encourage fiscal growth.

We continue to hold above-average cash levels that ensure we are well placed to take advantage of opportunities as they arise in the market.

Geoff Wilson Chairman/Portfolio Manager

Kate Thorley Chief Executive Officer/ Company Secretary

Chris Stott Chief Investment Officer/ Portfolio Manager

Matthew Haupt Portfolio Manager

Martin Hickson Senior Equity Analyst/Dealer

Tobias Yao Senior Equity Analyst

John Ayoub Senior Equity Analyst

James McNamara Head of Corporate Affairs

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AS AT 30 APRIL 2016

Investment Update & Net Tangible Assets Report

Diversified portfolio

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|||||||
|---|---|---|---|---|---|
|March 2016|April 2016|
|Investment Type|$m|%|$m|%|
|Listed Equities|$137.3|64.0|$135.2|64.7|
|Fixed Interest & Cash|$77.4|36.0|$73.7|35.3|
|Gross Assets|$214.7m|100.0|$208.9m|[]|100.0|
|Total shares on issue|172,768,120|174,169,283|[]|
||**This figure is after the 4.25 cents per share fully franked interim dividend and $98k (0.06 cents per share) paid in tax during the month. During the month, 1,401,163 shares were issued from the Dividend Reinvestment Plan (DRP) for the interim dividend.|
|Top holdings|Sector allocation|
|Market Value|Market Value as|
|Code|Company|
|$|% Gross Assets|
|SIQ|Smartgroup Corporation Limited|6,836,184|3.3%|
|NCK|Nick Scali Limited|6,696,651|3.2%|
|MYX|Mayne Pharma Group Limited|6,252,645|3.0%|
|24.9%|
|SXL|Southern Cross Media Group Limited|5,773,131|2.8%|
|35.3%|
|SGF|SG Fleet Group Limited|5,732,265|2.7%|
|RCG|RCG Corporation Limited|5,442,326|2.6%|
|VOC|Vocus Communications Limited|5,226,932|2.5%|
|0.1%|15.7%|
|AAD|Ardent Leisure Group|4,973,028|2.4%|2.7%|
|TRS|The Reject Shop Limited|4,919,587|2.4%|4.4%|
|7.0%|9.9%|
|VTG|Vita Group Limited|4,916,411|2.4%|
|ASB|Austal Limited|4,834,236|2.3%|
|CCP|Credit Corp Group Limited|4,796,313|2.3%|
|Consumer Discretionary: 24.9%|
|PME|Pro Medicus Limited|4,392,278|2.1%|
|Industrials: 15.7%|
|SDF|Steadfast Group Limited|4,390,595|2.1%|
|Financials: 9.9%|
|PSI|PSC Insurance Group Limited|4,229,490|2.0%|
|Health Care: 7.0%|
|CL1|Class Limited|4,170,275|2.0%|
|Information Technology: 4.4%|
|ECX|Eclipx Group Limited|3,448,758|1.7%|
|Telecommunication Services: 2.7%|
|CVW|ClearView Wealth Limited|2,988,516|1.4%|
|Consumer Staples: 0.1%|
|CTD|Corporate Travel Management Limited|2,971,684|1.4%|
|Cash and Fixed Interest: 35.3%|
|ISU|iSelect Limited|2,948,180|1.4%|

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Investment Update & Net Tangible Assets Report AS AT 30 APRIL 2016

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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*Annualised interim dividend

On 29 April 2016, the Company paid a fully franked interim dividend of 4.25 cents per share, an increase of 6.3% on the previous corresponding period. The dividend reinvestment price was $1.2645 after the 2.5% discount.

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