Geoff Wilson is one of the best and most experienced investors in Australia.
He knows how to identify an opportunity and he's not afraid to make a change to his own portfolio, or within one of the listed investment companies (LICs) that he manages along with his investment team.
Mr Wilson started a number of high-performing LICs including WAM Capital Limited (ASX: WAM) and WAM Microcap Limited (ASX: WMI).
Today we learned that over the past week Mr Wilson had sold around $181,000 of WAM Research Limited (ASX: WAX) shares and then invested that amount into WAM Leaders Ltd (ASX: WLE) shares.
Both of them are LICs. They both invest in ASX shares. WAM Leaders is focused more on shares within the ASX 200 (ASX: XJO), whereas WAM Research looks at small and medium cap growth shares. The investment performances of both have been strong, but over the past one and three years WAM Leaders' performance has actually outperformed WAM Research.
In 2019 WAM Leaders generated a gross return of 27.3% compared to WAM Research's 23.7%. The three-year average gross return per year for WAM Leaders was 13.2% compared to WAM Research's 7.9%.
But despite these numbers, WAM Leaders is trading at a slight discount to its net tangible assets (NTA) at December 2019 and WAM Research's share price is trading at a premium of more than 20% than its NTA, perhaps around 25%.
It seems like a fairly obvious move to do. Mr Wilson has just switched for a valuation that's 20% better than WAM Research which is also (currently) delivering better returns thanks to Matthew Haupt's stewardship.
Foolish takeaway
WAM Leaders has a grossed-up dividend yield of 6.4%. WAM Research's grossed-up yield is higher, above 9%, but they both depend on investment returns and WAM Leaders' yield may actually be more sustainable because it's lower.
