WAM Leaders Cranks HY Dividend Despite Tough Market Conditions

WAM Leaders Ltd (ASX: WLE) has announced it will increase its dividend payment by 6% in its FY19 half-year result.

WAM Leaders is a listed investment company (LIC) operated by investment firm Wilson Asset Management to invest in shares predominately in the ASX 200 Index.

What WAM Leaders Reported

It was a tough six months for share markets. The S&P/ASX 200 Accumulation Index (ASX: XNT) fell by 6.8% over the six months to 31 December 2018, and the WAM Leaders portfolio fell even more – it dropped 7.1% before the pain of fees and taxes. However, WAM Leaders can still say that since inception in May 2016 it has outperformed its benchmark by an average of 1.5% per annum before fees and expenses.

The investment performance translated into the accounts showing revenue falling to negative $59.1 million and a loss after tax of $42.5 million.

In net tangible assets (NTA) per share terms, it decreased by 8.5% during the period, including the 2.5 dividend payment and paying corporate tax.

WAM Chairman and Chief Investment Officer Geoff Wilson said: “Given the heightened volatility during the period, we increased our exposure to defensive sectors and invested in gold mining companies as a result of improvements in the US-China trade war.”

However, WAM Leaders can utilise previous profits to pay out a higher dividend. WAM Leaders has declared an interim dividend of 2.65 cents per share, which is 6% higher than the prior payment of 2.5 cents.

WAM Leaders is also going through the process of acquiring Century Australia Investments Limited (ASX: CYA), a smaller LIC valued at around $90 million that Wilson Asset Management also manages. On 12 February 2019 Century Australia shareholders voted in favour of the merger and on 18 February 2019 the Federal Court of Australia approved the merger.

Mr Wilson spoke of how the LIC structure allowed it grow the dividend despite the portfolio decline, “The dividend has been achieved through the performance of the investment portfolio since inception and the profits reserve available.”

WAM Leaders is trading at roughly its underlying assets and it now has a fully franked dividend yield of 4.5%. With the upcoming expected reduction of the management fee by 0.25%, thanks to the merger with Century Australia, WAM Leaders is more attractive than before the merger, but an ASX ETF like BetaShares Australia 200 ETF (ASX: A200) could also be one to consider.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here or enter your email address below to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just enter your email address below and we'll send you the report right away.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just click the link below and enter your email address. We'll send you the report right away.

CLICK HERE TO GET THE REPORT

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading:

General Financial Advice warning
The information on this website is general financial advice only. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms & Conditions and Financial Services Guide before using this website.

© Rask Australia 2020

Join 20,000+ smart investors

Join the Rask Australia mailing and we’ll send you free investment reports, podcasts, expert insights, investing courses, ASX news and lots, lots more. All free. 

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian-owned.

feedback-icon

What can we do better? Please give us us some feedback :)

We care about your experience, please let us know if you have any suggestions to improve our site.