MENU

Why I am excited by WAM Global Limited (ASX:WGB) shares

WAM Global Limited (ASX: WGB) is going to list onto the ASX at the end of this week. The listed investment company (LIC) has apparently raised $466 million for the IPO, which represents the largest capital raising that Wilson Asset Management has undertaken.

According to WAM, the priority allocation was oversubscribed, with close to two thirds of investors being shareholders in other WAM LICs. WAM Global will be the only LIC in the stable that invests in international shares.

WAM Capital Limited (ASX: WAM), WAM Research Limited (ASX: WAX) and WAM Microcap Limited (ASX: WMI) have built a history and reputation for identifying undervalued growth companies which have a catalyst that could boost the valuation.

WAM Global will be taking the same approach, and if it can’t identify an opportunity it will hold cash. That’s why around 25% to 30% (or more) of the portfolio will probably be cash at the start because of how high global valuations are and the current global political environment.

I’m excited by the targets that WAM Global will be targeting with e-commerce, millennials using smartphones, artificial intelligence & automation, 5G, electric vehicles, the rising Asian middle class and food scarcity as ideas. There are very few quality opportunities to take advantage of these themes on the ASX.

The WAM Global team have also said that it won’t be focused on any particular region whether it’s mature or emerging markets. Europe, Asia and North America – all regions will be looked at equally.

ASX valuations are much ‘richer’ than overseas ones, WAM Global might be able to find good opportunities more frequently than its locally-listed WAM peers.

The management fee is a little higher than the other WAM LICs, but hopefully the net performance makes up for it. The WAM Global investment team will need to prove to doubters that it can outperform its benchmark after management and performance fees over the long-term .

Foolish takeaway

If WAM Global can produce market-beating returns after fees, as well as paying a growing fully franked dividend, then it could become one of my favourite LICs on the market. It will need to generate some profit reserves first before it can start paying a dividend.

Love the idea of strong capital growth and dividends? This top stock just grew its dividend by more than 25% and is predicting profit growth of 30% this year.

OUR #1 dividend pick to grow your wealth over the new financial year is revealed for FREE here!

Financial year 2018 is here and The Motley Fool’s dividend detective Andrew Page has revealed his must buy dividend share to grow your wealth in 2018.

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.