# WAX - WAM Research



## System (4 May 2011)

Wam Research Limited (WAX), formerly Wilson Investment Fund Limited, is an investment company focusing on investment in a diversified portfolio of ASX listed small to medium industrial companies, primarily in Australia. MAM Pty Limited is the Manager of WAX.

http://www.wamfunds.com.au


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## BlindSquirrel (9 November 2017)

resurrecting this old one. It seems that since the last dividend a few weeks ago the price tanked to around the DRP price without any other obvious reasons for the 5c drop. Not carrying it for the growth potential but still...


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## GlobeTrekker (12 November 2017)

BlindSquirrel said:


> resurrecting this old one. It seems that since the last dividend a few weeks ago the price tanked to around the DRP price without any other obvious reasons for the 5c drop. Not carrying it for the growth potential but still...



People may be being put off by the huge premium that WAX now has - I sold most of what I had just before the ex-div date when the premium was around 33%.  As good as Geoff Wilson is, I just couldn't see that high a premium being sustainable.  I'll happily buy back in if the premium reduces by a reasonable amount though.


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## bigdog (22 April 2019)

I have been a WAX shareholder for many years and sold in October 2018

WAX was a great share for me.

https://kalkinemedia.com/2019/04/14/why-are-these-2-stocks-down-lately-wam-wax/

WAM Capital Limited and WAM Research Limited both forms part of the financial group Wilson Asset Management led by Chairman Geoff Wilson. It has been observed that both the stocks have been trading on the downside of the market demonstrating the significant volatility in the global financial sector industry. Let’s take a deep dive into why these two stocks are down lately:

*WAM Capital Limited (ASX:** WAM**)*
Financial sector company WAM Capital Limited has seen a massive downtrend in the long-run performance of its stock on the Australian Securities Exchange. The stock has declined by 15.66% over the past 12 months with the continued downtrend in the near-to-midterm.

The negative market sentiments describe the continued impact of macro-economic factors which were again mixed in March 2019. Results from the March German purchasing managers’ index (PMI) survey reportedly showed that manufacturers’ expectations were at their worst level in six-and-a-half years.

The major headwind in the financial industry includes the recent inversion in US Treasury bond yield curve. On 22 March 2019, United States 10-years Treasury bond yield fell below the three-month yield for the first time in over a decade. The inversion in March was driven in part by the flow of funds from German Bonds into US Treasuries which are expected to offset its predictive nature.

WAM Leaders, Lead Portfolio Manager, Mattew Haupt stated that the outlook for the Australian economy is bleak as neither monetary nor fiscal policy appear to save the economy. This again puts the Australian economy to be highly dependent on China to avoid a recession, he added.

The investment companies of WAM Capital have started trading ex-dividend, thereby indicating another major factor for the decline in WAM Capital stock price.

WAM Capital stock last traded at $2.080, down 0.952%, on 12 April 2019. The stock has declined by 6.25% and 5.83% in the past three months and one month, respectively.

*WAM Research Limited (ASX: **WAX**)*

WAX stock price has declined 15.19% over the past 12 months including a negative price change of 7.59% in the past three months.

Driven by the above mentioned macro-economic factors and the related volatility in the equity market, WAM Research reported the decline of 11.1% in the half year to 31 December 2018. This resulted in a reduction of $26 million in assets which led to an operating loss after tax of $18.6 million.

The company’s cash levels have increased from 25.6% to 53.3% during the half-year ended 31 December 2018, thereby reducing the group’s exposure from 45 to 38 individual companies. However, the cash levels have been softened in the recent past as the fixed interest and cash component declined to 23.9% of $220.4 million gross assets in March 2019.

WAX fell 1.866% to last trade at $1.315 on 12 April 2019.

To end on the positive note, it can be observed that Chairman, Geoff Wilson has expressed the optimism towards the global equity market, underpinned by the dovish stance of US Federal Reserve. It becomes more evident by the shift in WAM’s fixed interest and cash percentage of total gross assets from 32.7% in February 2019 to 27.0% of its $1,322.2 million gross assets in March 2019.

Mr Wilson stated that now he is ‘only a little bit bearish’ compared to his ultra-bearish outlook at the end of last year.


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## So_Cynical (22 April 2019)

The 10 year chart is better than the 5, looks to be rolling over on the 5, SP back to where it was in 2014/15 ~ yield over 7% if it holds? but it cant.

EDIT: just noticed the charts are for WAM the wrong WAM LIC, very similar pattern though, all the Wilson LICs are getting sold off.
~


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## peter2 (22 April 2019)

@bigdog. Good timing with your exit. Like you, I've been a past holder and therefore a watcher of these Wilson funds. For a few years these funds were in demand and trading with a huge premium. There was a good edge trading around the XDiv dates. That is no longer the case as demand has waned and the premiums diminishing. 

The performance of these funds deteriorated at the same time they sought to establish more of them (global, microcap, leaders). I have no doubt management lost focus on the original funds while working to establish the newer ones. They fumbled the ball. Investors have realised this and sold, reducing the premiums. 

They have repeated the pattern of all fund managers, they have a good few years, think they're exceptional and raise more capital based on their few good years. 

Now they seem to be totally out of sync with the market. They need a strong manager to get them back to basics and their initial investing plan, if they actually have one. Their CEO is running around the country raising awareness of Labor's proposed changes to franking credits. He needs to be focusing his attention on the performance of their funds. 

All the above is minor when compared to my real pet peeve with the profession of fund managers. 

Reading their latest March 2019 Investment update I see their claim for their performance of WLE (WAM Leaders - large cap Aust companies) is *11.1% pa*. This fund was established in May2016 and the open price was 1.09. Now more than three years later the last close was 1.102.  That's no capital growth for the investor. They've paid a total of 10.65c in divs over that time. 

Would someone please explain how they can claim a performance of +11.1% *per annum*?


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## So_Cynical (22 April 2019)

peter2 said:


> Reading their latest March 2019 Investment update I see their claim for their performance of WLE (WAM Leaders - large cap Aust companies) is *11.1% pa*. This fund was established in May2016 and the open price was 1.09. Now more than three years later the last close was 1.102.  That's no capital growth for the investor. They've paid a total of 10.65c in divs over that time.




Yep was just reading the same and looking at all their charts, WMI the micro-cap fund floated in late 17 at 1.10 - now trading at 1.20 hardly 
inspirational, the Global fund WGB floated in late 18 at 2.20 now 1.91 and hasn't paid a dividend.


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## IrishDigger (22 April 2019)

Interesting and informative thread, given that I am a small holder of WAA and FGX.


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## Belli (23 April 2019)

Don't hold and never have nor do I follow any of the manager's funds but is the reported performance before or after fees?


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## BlindSquirrel (23 April 2019)

peter2 said:


> @bigdog.
> Reading their latest March 2019 Investment update I see their claim for their performance of WLE (WAM Leaders - large cap Aust companies) is *11.1% pa*. This fund was established in May2016 and the open price was 1.09. Now more than three years later the last close was 1.102.  That's no capital growth for the investor. They've paid a total of 10.65c in divs over that time.
> 
> Would someone please explain how they can claim a performance of +11.1% *per annum*?




Is it growth in the NTA? That would mean that the LIC would be trading at an increasing discount.


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## Smurf1976 (26 April 2019)

peter2 said:


> Would someone please explain how they can claim a performance of +11.1% *per annum*?



Wishful thinking given their actual performance is just under that over three years.

They might be using a different calendar to the rest of us?


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## peter2 (26 April 2019)

BlindSquirrel said:


> Is it growth in the NTA? That would mean that the LIC would be trading at an increasing discount




Yes it seems that this may be right. If the NTA  (WLE) started at 1.00 and its now 1.21 with 0.10 paid divs.
This would calculate near their 11%pa figure.

So while the fund managers pat themselves on the back, their investors have earned only 1/3 of that.
Received the invite to their shareholders meetings. I'm not going, but I hope someone asks about this performance gap.


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## Miner (26 April 2019)

Smurf1976 said:


> Wishful thinking given their actual performance is just under that over three years.
> 
> They might be using a different calendar to the rest of us?



You made me to laugh .


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## bigdog (27 April 2019)

peter2 said:


> Yes it seems that this may be right. If the NTA  _*(WLE) started at 1.00*_ and its now 1.21 with 0.10 paid divs.
> This would calculate near their 11%pa figure.




I bought WLE in the beginning (May 2016) and paid $1.10 which included rights to options

Also paid for options at $1.10 in 2017

Sold all in Feb 2018


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## GlobeTrekker (28 April 2019)

Belli said:


> Don't hold and never have nor do I follow any of the manager's funds but is the reported performance before or after fees?



Reported performance figures are before expenses, fees and taxes, so they look a lot better than actual return to shareholders. I recently sold the last bits of WAM and WAX that I'd been holding onto, figuring that their below average performance over the last 3 years (even before taking out their fees) was beginning to take a toll on their big premiums plus the uncertainty with franking credits changes. I'm now only holding WMI from the WAM group (trading at a small discount), though I'm a bit tempted by WGB whose discount has widened to more than 10%.


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## BlindSquirrel (29 April 2019)

peter2 said:


> Received the invite to their shareholders meetings. I'm not going,




They provide free sandwiches! It won't make up for the losses but it's something.


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## finicky (24 February 2021)

*Dear Fellow Shareholder,*​The WAM Research Limited (ASX: WAX) Board of Directors today *announced* the Company's FY2021 half year results. WAM Research achieved a 205.2% increase in operating profit before tax to $44.6 million and a 188.0% increase in operating profit after tax to $31.7 million. The operating profit for the period is reflective of the strong investment portfolio performance over the period.

The Board of Directors declared a fully franked interim dividend of 4.95 cents per share, representing an annualised fully franked dividend yield of 6.3%* and a grossed-up dividend yield of 9.1%**.

The Dividend Reinvestment Plan (DRP) will be operating at a 2.5% discount for the interim dividend.

Held


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