MENU

Why I have high hopes for WAM Global Limited (ASX:WGB)

I think it’s only worth investing in active fund managers if you think they can beat the market after fees. The most obvious way to judge that is past performance.

Although past performance isn’t necessarily an indicator of future performance, outperforming is a good sign. If you think the current holdings can also beat the market, that’s another good sign.

Wilson Asset Management recently launched WAM Global Limited (ASX: WGB), which is the latest listed investment company (LIC), it focuses on small to mid-cap international growth shares.

The definition of ‘small’ is slightly different to small cap ASX shares when you’re looking at overseas shares – the market capitalisation is usually measured in billions not millions.

There are far more investment opportunities listed overseas than on the ASX. Australia only makes up about 2% of the total listed businesses.

WAM Capital Limited (ASX: WAM), the flagship WAM LIC, has been running for almost two decades. Since inception in 1999, WAM Capital has delivered returns of 17.5% per annum before fees and expenses. I’m not sure WAM Global will be able to match that return over the long-term, but the average return per annum over the past five years of 14.5% could be quite achievable.

Despite having a diverse portfolio with a market-beating investment manager, a discount to the underlying NTA is starting to open up. The current share price of $2.13 seems to suggest a 4% discount to the post-tax NTA reported at the end of September 2018.

It has many recognisable names in its top holdings including American Express, Hasbro and Reckitt Benckiser.

WAM Global also appears to be following the WAM mantra of keeping a large amount of cash on hand for protection and opportunities. At the end of September 2018, 33.6% of the portfolio was held as cash.

Foolish takeaway

Over the long-term I think WAM Global could become one of the attractive dividend shares on the ASX and also deliver pleasing total returns. The share price may be lower than the listing price, but the NTA is higher – despite the market volatility.

If it continues to trade at a discount then I’ll likely add to my holding over time.

Another share that I have high hopes for is this top growth share which is the clear Australian market leader and is now expanding to Asia.

The best dividend stock to buy today

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 WAMGLOBAL FPO. 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.