Geoff Wilson is the man behind the name of Wilson Asset Management (WAM), which manages several high-performing listed investment companies (LICs) like WAM Capital Limited (ASX: WAM), WAM Research Limited (ASX: WAX) and WAM Microcap Limited (ASX: WMI).
Another of the LICs WAM is WAM Leaders Ltd (ASX: WLE). This LIC invests in companies in the S&P/ASX 200 Index.
Theoretically, it’s more difficult to generate market-beating returns with shares just from the ASX200 because you have less stocks to choose from than if you can pick any share on the ASX.
Since the half-yearly WAM city presentations finished, Geoff Wilson has been buying shares of WAM Leaders. Since the end of May he has bought around $286,500 worth of WAM Leaders shares.
The main reason he did this is because WAM Leaders was trading at a discount to its NTA before tax. At the end of April the share price was $1.12 and the NTA before tax was $1.18. The discount was despite the WAM Leaders portfolio delivering a return of 14% before fees over the past year, compared to the index’s 5.5% return.
WAM Leaders initially launched with a significant number of options, but the option period is over and now I think fees would be the only concern investors could have, considering its outperformance of the market.
It has steadily increased its dividend yield since listing and now has a grossed-up dividend yield of 6.3%.
WAM Leaders looks like good value for its current performance, which also includes some of the portfolio being in cash. Although I prefer WAM Research to WAM Leaders, I think WAM Leaders would be a good option for passive investors.
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Motley Fool contributor Tristan Harrison owns shares of WAM MICRO FPO and WAM Research Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.