WAM RESEARCH LIMITED — Net Asset Value 2016

Mar 13, 2016

Investment Update & Net Tangible Assets Report AS AT 29 FEBRUARY 2016

Performance

							Since change in investment
Performance at			Fin		3 Yrs	5 Yrs	strategy (Jul-10)
29 February 2016	1 Mth	6 Mths	YTD	1 Yr	%pa	%pa	%pa
WAX Investment Portfolio*	-3.6%	7.8%	12.6%	15.4%	18.7%	17.1%	18.9%
S&P/ASX All
Ordinaries	-1.5%	-3.1%	-6.4%	-12.2%	3.2%	4.6%	7.0%
Accumulation Index
Outperformance	-2.1%	+10.9%	+19.0%	+27.6%	+15.5%	+12.5%	+11.9%

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

Net Tangible Assets (NTA) figures

Net Tangible Assets (NTA) figures
NTA before tax 117.27c
NTA after tax and before tax on unrealised gains 116.29c*
NTA after tax 116.15c*

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WAM Research Limited

WAM Research Limited
ASX Code	WAX
Listed	Aug 2003
Gross assets	$207.7m
Market cap	$236.7m
Share price	$1.37
NTA before tax	$1.17
Shares on issue	172,768,120
Fully franked annualised interim dividend (FY2016)	8.5c
Dividendyield	6.2%

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

*These figures are after the payment of $352k (0.20 cents per share) in tax during the month.

Company overview

Market overview

Extreme volatility continued to characterise the Australian equity market in February. The S&P/ASX All Ordinaries Accumulation Index fell sharply in the first half of the month and after recovering some ground, the Index finished the month slightly lower, down 1.5%. The Australian share market entered a technical bear market in February, declining 20% from its April 2015 high.

The overall tone of the market leading into reporting season was fairly bearish on account of the prevailing macroeconomic environment. Although market conditions were volatile and expectations were low, company results were relatively good and ahead of expectations outside the mining sector. Early in the season, the market's negative sentiment overrode the positive results delivered by a number of companies, causing considerable volatility in their share prices, particularly businesses with high levels of debt.

With further volatility expected, positive performance will continue to be limited to a number of industry sectors and will be very much stock-specific. While the Australian share market may fall further in the short to medium term, we believe that over the course of the bear market, opportunities will become more apparent. A historical analysis of bear markets reveals that after reaching a low point, the share market rebounds sharply with the majority of gains being made immediately after the market hits its bottom. Research also shows that while the average bull market lasts for 55 months, the average bear market lasts just 17 months. Our current high cash weighting ensures we are well positioned to seize opportunities as and when they arise.

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

Matthew Haupt Portfolio Manager

Martin Hickson Senior Equity Analyst/Dealer

Tobias Yao Senior Equity Analyst

James McNamara Head of Corporate Affairs

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AS AT 29 FEBRUARY 2016

Investment Update & Net Tangible Assets Report

Diversified portfolio

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||||||
|---|---|---|---|---|
|January 2016|February 2016|
|Investment Type|$m|%|$m|%|
|Listed Equities|$108.2|50.1|$104.8|50.5|
|Fixed Interest & Cash|$107.9|49.9|$102.9|49.5|
|Gross Assets|$216.1m|100.0|$207.7m*|100.0|
|Total shares on issue|172,768,120|172,768,120|

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*This figure is after the payment of $352k (0.20 cents per share) in tax during the month.

Sector allocation

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|||||||
|---|---|---|---|---|---|
|Top holdings|Sector allocation|
|Market Value|Market Value as|
|Code|Company|
|$|% Gross Assets|
|RCG|RCG Corporation Limited|6,874,379|3.3%|
|SIQ|Smartgroup Corporation Limited|6,486,465|3.1%|
|SGF|SG Fleet Group Limited|6,014,724|2.9%|
|18.8%|
|SRX|Sirtex Medical Limited|5,764,768|2.8%|
|TRS|The Reject Shop Limited|5,474,312|2.6%|
|VOC|Vocus Communications Limited|4,966,494|2.4%|11.6%|
|49.5%|
|SXL|Southern Cross Media Group Limited|4,193,622|2.0%|
|BWX|BWX Limited|4,129,112|2.0%|5.7%|
|CCP|Credit Corp Group Limited|4,084,489|2.0%|5.7%|
|4.2%|
|PSI|PSC Insurance Group Limited|3,807,178|1.8%|2.0%|2.5%|
|CL1|Class Limited|3,339,433|1.6%|
|ECX|Eclipx Group Limited|3,285,641|1.6%|
|BBN|Baby Bunting Group Limited|3,117,262|1.5%|
|Consumer Discretionary: 18.8%|
|BLX|Beacon Lighting Group Limited|2,997,689|1.4%|
|Industrials: 11.6%|
|PME|Pro Medicus Limited|2,808,968|1.4%|
|Financials: 5.7%|
|AAD|Ardent Leisure Group|2,804,485|1.4%|
|Health Care: 5.7%|
|CKF|Collins Foods Limited|2,514,112|1.2%|
|Information Technology: 4.2%|
|IPH|IPH Limited|2,474,097|1.2%|
|Telecommunication Services: 2.5%|
|ISU|iSelect Limited|2,198,038|1.1%|
|Consumer Staples: 2.0%|
|CIW|Clime Investment Management Limited|2,182,130|1.1%|
|Cash and Fixed Interest: 49.5%|

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Investment Update & Net Tangible Assets Report AS AT 29 FEBRUARY 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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On 16 February 2016, the Company announced a fully franked interim dividend of 4.25 cents per share, an increase of 6.3% on the previous corresponding period. The dividend reinvestment plan (DRP) will operate at a 2.5% discount for the interim dividend. To participate in the DRP, shareholders should send their DRP Election Form to the Company’s share registrar (Boardroom) no later than 18 April 2016.

Key dividend dates

Ex date: 13 April 2016 Record date: 14 April 2016 Last election date for DRP: 18 April 2016 Payment date: 29 April 2016

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