For those of you who haven't heard of WAM, it stands for Wilson Asset Management. WAM is an investment company that offers a range of listed investment companies (LICs) on the ASX. WAM's flagship LIC WAM Capital Limited (ASX: WAM) has been around since 1999 and during that time has delivered a return of 16.7% per annum, so they are a group that investors take fairly seriously.
WAM's newest LIC goes by the name of WAM Global Ltd (ASX: WGB) and has only been trading since June 2018. During this time, WAM has not set anything on fire. It IPO'ed for an offer price of $2.20 per share, but has failed to exceed that price since the few weeks following its IPO and today trades for a price of $1.96.
Why I like WAM Global
Firstly, WAM Global takes the WAM investment strategy beyond our shores. Over the last 20 years, WAM's LICs have been centred on the ASX and what our local exchange offers. For the first time, WAM has an LIC that invests in overseas companies – this is a huge advantage as most retail investors concentrate their investments on the 2% of the global market that trades on the ASX.
So officially, WAM Global invests in "small to mid-cap international companies". This seems a little incongruous with WAM's current holdings I have to say. Two of WAM Global's top holdings are Alphabet Inc. (Google) and American Express Company, which are two of the largest companies in the world. But hey, I won't get carried away with semantics.
Secondly, WAM Global is currently trading with a near 14% discount to its net tangible assets (NTA). This means that, if you were to buy a WGB share, you are getting $2.23 of value (its most recent NTA per share) for $1.96 (its current share price). If WAM Global's share price returns to its actual value, you will get an easy 14% return without breaking a sweat. This is probably the reason why WAM founder Geoff Wilson has been adding heavily to his personal position over the last few months.
Foolish takeaway
Unlike the other WAM LICs, WGB does not yet pay a dividend, which I'm sure will not be the case for long. Once this starts up, I expect that other WAM investors will start to pay more attention to this LIC and its discount will start to narrow if not disappear. I will personally be trying to add as many shares as possible before this happens.
