There has long been talk and suggestions of Wilson Asset Management launching a globally-focused listed investment company (LIC). Well, the team have just announced that WAM Global Limited will indeed become reality.
Closed-ended global investment vehicles are popping up regularly, with Magellan Global Trust (ASX: MGG) being one of the latest to raise a significant sum of capital from investors.
I think it's important that investors have a lot of exposure to overseas shares. The Australian economy isn't growing strongly any more and 97% of companies are listed overseas.
What will the investment process be?
The Wilson team have stated that they will use the same proven investment process to invest in undervalued international growth companies. It will be interesting to see if this means shares with market capitalisations of over US$100 billion will be excluded or not.
Shares like Alphabet (Google) and Apple have both arguably been undervalued over the last year, so hopefully they aren't excluded from the potential investment list.
Will it pay a good dividend?
As long as WAM Global can generate strong returns then it will create the profit reserves needed to pay a growing dividend.
However, I'm not expecting the dividend will be as big as WAM Capital Limited (ASX: WAM) or WAM Research Limited (ASX: WAX). It may also be harder for WAM Global to generate as many franking credits due to international and Australian taxation laws.
Should you invest?
I'm very interested about investing in WAM Global shares. There are a lot of exciting shares not on the ASX that the WAM team can choose from.
Over the long-term I expect this LIC will outperform most of the other WAM LICs and the market.
Investors who don't have much (or any) exposure to overseas investments should keep a close eye out for more information about the LIC in the coming months. I will also follow up with a few articles if anything material comes to light.
