WAM - WAM Capital

[finicky]

Yes very different choices to WAM and I guess WMI would be a closer fit. I see WIC and OZG both hold a lot of cash and gold related stocks*
WIC: Cash 18%, Gold 29% (including 3% of KCN and 11% of WAF
OZG: Cash: 21%, Gold 35%
* as at November's monthly statement6

 

[divs4ever]

WIC and OZG appear to be trading a big part of their holdings , maybe 'buy the rumor sell the news ' but they have been surprisingly resilient over the last 10 years ( although div. leveling has probably kept the retail folk holding ) it will be a hard strategy to replace with a LIC if the takeover completes

 

[Belli]

Bell Potter report of 17 December. Is the reduction in performance from the five year mark compared with some of the other LICs due to WAM's habit of acquiring other LICs? I don't know if that is the case but there seems to be a drag on performance looking at MIR (same category - I hold MIR) and the larger LICs such as ARG (I hold) and AFI.

 

[Belli]

Goodness me. Just had a look at some MER's.

ARG: 0.18%
AFI: 0.18%
MIR: 0.7%
WAM: 1% and performance fee

Why is WAM charging that for what doesn't appear to be a stellar performance as of late?

Or, alternatively, why are investors prepared to pay that?

 

[Dona Ferentes]

Goodness indeed.

I have always seen GW and his merry troupe as being marketers of product; to me, the McGuigans of the LIC space. The Wilson team has been assiduous at doing presentations, of reaching out and there is definitely a loyal cohort of sticky investors who hear the story.

But , and I won't dig down to recent Annuals, when I looked at it more intensely, the annual payout was much more driven by capital gains, often under 12 months, rather than paying through dividends received, and that must impact those longer term numbers. The headline is the story.

And the Monthly updates only list the Top 20 in alphabetical order. Too much trading?

Like you, @Belli, I hold the first three but not WAM. I have a few WMA which was a screaming buy (but still under NTA).

 

[finicky]

@Belli Good at publicity? Following from that - brand. A lot of pople would recognize and have a positive reaction to the name. Example is the campaign led by Geoff Wilson against Labor's policy to ditch franking credit refunds. They're always coming up with flurries of ASX announcements - I've stopped reading them. Image would mostly account for me buying them Apr 2019 at close to today's price.
The chart had been performing well for years before that.
I'm pretty sure I would have noted the steady franked dividend even for bad years. Not that expensive if you look at return on equity. I continue to quite like them as a place to park and feel a bit reassured by the cash they hold in reserve and their readiness to increase that. But what distinguishes them is probably mostly brand.

 

[Belli]

I only noticed there was a a bit of chatter about WAM on this forums and became curious - a bad habit really.

I don't know much about GW's products to be honest. I think WAM is more of a trader than any of the other older LICs and the LIC Capital Gain Discount doesn't apply as a consequence.

 

[divs4ever]

that lack of discount nearly always dulls my interest in a LIC ,

the other question i haven't seen asked ( anywhere i have been watching ) is what is the critical mass-size of WAM ??

it is currently trying to absorb PAF , WIC , and OZG ( and EZL ) but not much of those 3 portfolios fits nicely inside the WAM mandate , which means selling , transferring to a stable-mate , or starting another LIC

this can't be easily compared to the SOL absorption of MLT

so the WAM expansion just seems to be about getting more funds under-management ( or taking out rivals )

given the current WAM mandate surely it has a maximum size to limit being a cost-efficient fund ( not warp the market during portfolio shifts wrecking the price )

 

[divs4ever]

Goodness indeed.

I have always seen GW and his merry troupe as being marketers of product; to me, the McGuigans of the LIC space. The Wilson team has been assiduous at doing presentations, of reaching out and there is definitely a loyal cohort of sticky investors who hear the story.

But , and I won't dig down to recent Annuals, when I looked at it more intensely, the annual payout was much more driven by capital gains, often under 12 months, rather than paying through dividends received, and that must impact those longer term numbers. The headline is the story.

And the Monthly updates only list the Top 20 in alphabetical order. Too much trading?

Like you, @Belli, I hold the first three but not WAM. I have a few WMA which was a screaming buy (but still under NTA).

yes some like WAX turn over the portfolio vary aggressively just a the constant swirl of names on the 'top 20' list is a fair indication of that

( but to me in WAX's case that is acceptance , if it were happening in say BKI and QVE i would find the less attractive )

and also Geoff Wilson has made unsuccessful raids on several other LICs one might wonder if analyzing investment ( inside the portfolio ) opportunities is a primary focus there ( i think the call it PNI now after a name/ticker change )

 

[divs4ever]

Goodness me. Just had a look at some MER's.

ARG: 0.18%
AFI: 0.18%
MIR: 0.7%
WAM: 1% and performance fee

Why is WAM charging that for what doesn't appear to be a stellar performance as of late?

Or, alternatively, why are investors prepared to pay that?

when i was looking at LICs ( to buy ) only WAX seemed to justify the fees charged in the Wilson stable ( i don't mind paying the fees WHEN then can actually outperform my guesstimate benchmark )

i found QVE and BKI more suitable when comparing the WAM mandate to equivalent peers , but if LICs like AFI , ARG , AUI or even CIN and WHF were to drop in price without being caught in a disaster , they are still included in my low priority watch-list and could easily get moved near the top of the list .

 

[divs4ever]

Bell Potter report of 17 December. Is the reduction in performance from the five year mark compared with some of the other LICs due to WAM's habit of acquiring other LICs? I don't know if that is the case but there seems to be a drag on performance looking at MIR (same category - I hold MIR) and the larger LICs such as ARG (I hold) and AFI.

View attachment 134861

on that list i also hold CAM , BKI , but to the newcomers CAM has changed it's mandate several times in the last few years and managed to do so without a major stumble ( and stumbles are easy if you start wandering outside your comfort zone )

 

[Dona Ferentes]

ARG: 0.18%, AFI: 0.18%, MIR: 0.7%
WAM: 1% and performance fee

Why is WAM charging that for what doesn't appear to be a stellar performance as of late?

not having a go, because quite often MER isn't the total cost incurred to run a company; did you get those numbers from the Bell Potter spread?

From the latest Monthly reports:
AFI : Management cost: 0.14 per cent, no performance fees.
ARG : MER 0.14% ( Internal management structure ensures low operating costs and no external fees)
MIR : Management cost: 0.50 per cent, no performance fees. (... and it has been coming down as FUM increases; Feb 2020, 0.61 per cent)
WAM : can't find anything in the Monthly update. Probably there in the Annual Report. I'll believe yr numbers.

I just did an IRR report for assets I hold, to 31 Dec. Some pleasing numbers for the LICs; consistent too.
Returns include franking and are for ......... 12 months .... 3 years .... 5 years .....10 years ... Since inception (early 2007 incl GFC)
Australian Foundat. - Ordinary Fully Paid (AFI) ... 21.17% ... 18.52% ... 13.70% .... 14.31% ... 8.76%pa
- Argo Investments - Ordinary Fully Paid (ARG) ... 27.16% ...16.09% ... 12.08% .... 13.50% .... 8.34%pa
Mirrabooka Invest. - Ordinary Fully Paid (MIR) ... 29.41% ... 25.07% ... 12.59% .... 19.90% .... 12.35%pa

Of course, some say these are "buy and hold" or 'set and forget" but that isn't necessarily true. The management of each is making decisions all the time (" actively managed in a tax-aware manner within a low cost structure ") ; plus there is the opportunity to participate in rights issues/ SPPs and enhance returns if so inclined (Buy if below NTA; Sell if above NTA) .

 

[Belli]

not having a go, because quite often MER isn't the total cost incurred to run a company; did you get those numbers from the Bell Potter spread?

All good. I was even lazier than that and got them from the ASX product list.

As for WAM much like others in the stable. Who gives a rats about Directors fees when there is $30M flowing out in management and performance fees. To whom I wonder - actually I don't.

 

[Ann]

As for WAM much like others in the stable. Who gives a rats about Directors fees when there is $30M flowing out in management and performance fees. To whom I wonder - actually I don't.

I remember when this was listed back in '99 for $1. Geoff was pumping it in Shares Magazine, it was his first fund. I got a company report from them as back in those days there were no charting systems and I attempted to do it on a fundamental basis.
After reading through all the information very carefully I decided it wasn't for me. Hidden in all the gumph in various sections there were a couple of hidden words in different sections. BAM and MAAM. I thought to myself...funny man, WAM, BAM, thank you MAAM! No thank you SIR!
Then I did a bit more research and found his old man Carl Wilson appeared a bit dodgy. So decided if father like son best to keep clear.

Fund founders clipped​

Two young guns who were raised in the halcyon days of the venerable Melbourne broking firm McIntosh (now Merrill Lynch) have found themselves in a spot of bother with the taxman.

Carl Wilson and Graeme Little, who went on to found and run Greenchip Funds Management - which advocated shares in small companies over blue-chip stocks - will have to pay the ATO a hefty sum over unpaid tax on a $500,000 deduction each of them claimed as part of an employee share plan.

Little settled the dispute with the Tax Office for an undisclosed sum but Wilson told the court that he had to withdraw from settlement negotiations "following a police raid on [his home/office] that was thought to be in connection with [the offshore tax scheme crackdown] Operation Wickenby" in October 2005.

To add to his woes, Wilson will have to pay the tax he owes, plus interest going back seven years and a hefty penalty, after the court threw out his case.

The fund was wound up at the end of 2000.

Wilson has left the country and is building a funds management business in Europe and Dubai.

Dying sheep gives UBS the heave-ho

Michael Evans banished some gnomes to the back of the garden, next to the compost heap.

www.smh.com.au

 

[divs4ever]

not having a go, because quite often MER isn't the total cost incurred to run a company; did you get those numbers from the Bell Potter spread?

From the latest Monthly reports:
AFI : Management cost: 0.14 per cent, no performance fees.
ARG : MER 0.14% ( Internal management structure ensures low operating costs and no external fees)
MIR : Management cost: 0.50 per cent, no performance fees. (... and it has been coming down as FUM increases; Feb 2020, 0.61 per cent)
WAM : can't find anything in the Monthly update. Probably there in the Annual Report. I'll believe yr numbers.

I just did an IRR report for assets I hold, to 31 Dec. Some pleasing numbers for the LICs; consistent too.
Returns include franking and are for ......... 12 months .... 3 years .... 5 years .....10 years ... Since inception (early 2007 incl GFC)
Australian Foundat. - Ordinary Fully Paid (AFI) ... 21.17% ... 18.52% ... 13.70% .... 14.31% ... 8.76%pa
- Argo Investments - Ordinary Fully Paid (ARG) ... 27.16% ...16.09% ... 12.08% .... 13.50% .... 8.34%pa
Mirrabooka Invest. - Ordinary Fully Paid (MIR) ... 29.41% ... 25.07% ... 12.59% .... 19.90% .... 12.35%pa

Of course, some say these are "buy and hold" or 'set and forget" but that isn't necessarily true. The management of each is making decisions all the time (" actively managed in a tax-aware manner within a low cost structure ") ; plus there is the opportunity to participate in rights issues/ SPPs and enhance returns if so inclined (Buy if below NTA; Sell if above NTA) .

i hold WAX and that WAM estimate ( because you are talking performance fees ) is about right BUT i expect a high-fee fund to produce the goods most of the time .. now WAX has done very nicely for me , but what of the other stable-mates ??

add to that WAM's acquisitive tendencies and you might wonder how much of that out-performance is strictly predatory take-overs since it ISN'T trying to acquire LICs operating in the same investing theme ( if it were it would be chasing say , MIR , AMH or WHF )

 

[Belli]

I had a look (my mistake) at WAM. I see the claim is it returned 16.4% since inception and compared that return to the ASX All Ords Accumulation Index. Seems it is done that way as the ASX Accumulation does not take taxes and fees into account so the reported return is also before fees and taxes. Seems fair enough apart from the fact the ASX Accumulation Index doesn't take 8% in fees from revenue income.

If anybody wishes to invest in the GW products on offer do so by all means and I hope it works for them. Not sure if some understand how much they are paying to get that dividend.

I'll stick with the plodders LICs I hold and the smaller MIR along with the two ETFs. Probably the worse thing an investor can do is fiddle with their holdings looking for that edge. Broad based, low-cost diversified holdings work well. Keep buying no matter the circumstances and allow time and compounding to do their work.

 

[divs4ever]

i 'fiddle ' by adding more LICs ( and ETFs ) at opportune moments ( and several are DRPed ) , some plodders like IBC and BKI and some adaptable ( like CAM and CDM ), and some rather adventurous ( like WAX and WIC )

obviously the trick is to get the entry ( and top up ) prices close to right

now i don't live and breathe 'bigger is better ' in the LIC/ETF world sometimes smaller means agile and nimble ( see CDM in March 2020 ) compared to me BUYING selectively in that month ( because i had already taken some profits at sensible levels , in the previous 3 months )

but then i am retired , i can watch the markets , go to some medical appointments or just nap , the members out there still earning an income have other priorities , so make other choices

 

[Belli]

i 'fiddle ' by adding more LICs ( and ETFs ) at opportune moments ( and several are DRPed ) , some plodders like IBC and BKI and some adaptable ( like CAM and CDM ), and some rather adventurous ( like WAX and WIC )

obviously the trick is to get the entry ( and top up ) prices close to right

now i don't live and breathe 'bigger is better ' in the LIC/ETF world sometimes smaller means agile and nimble ( see CDM in March 2020 ) compared to me BUYING selectively in that month ( because i had already taken some profits at sensible levels , in the previous 3 months )

but then i am retired , i can watch the markets , go to some medical appointments or just nap , the members out there still earning an income have other priorities , so make other choices

I am also retired.

I also attend medical appointments.

I nap sometimes.

I am not earning a wage

I don't fiddle.

I don't watch the markets constantly but infrequently (when I have funds and am going to buy)

Result is VAS will pay me a five figure sum in distribitions this January and VGS not all that far from one.

It did not require me to buy selectively or chase the smaller and agile. That is a speculative mindset not an investing one. As for BKI there are better in my view.

And IBC?

 

[divs4ever]

yes IBC which currently is the majority of my bond/corporate debt exposure , not super fantastic performance but ( corporate ) bonds could come back in the next 5 years .

i am mostly chasing divs at a fair price , one day ARG ( or AFI or AUI ) will come down to an acceptable price . it just hasn't happened yet ( while i have been watching )

PS i find fiddling more productive than watching TV or Twitter , but to each his own

 

[Belli]

Post #99 makes no sense whatsoever. "bonds could make a comeback in the next 5 years." Really? No evidence provided apart from a wild guess.

Not going to bother with the poster any longer.