Wilson Asset Management has released its December 2020 investment update for its 7 listed investment companies including WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM).
Here's how the fund performed last month, and the ASX shares it has been buying to deliver a strong investment portfolio performance.
WAM Capital
The WAM Capital investment portfolio focuses on undervalued growth opportunities in the ASX. The portfolio has increased 22.8% in the financial year to date, outperforming the index by 7.1%.
In December, WAM Capital investment portfolio outperformed the All Ordinaries Index (ASX: XAO). The ASX shares that led to its outperformance included affordable accommodation and services provider Ingenia Communities Group (ASX: INA) and mortgage broker and financial solutions provider Australian Financial Group Ltd (ASX: AFG).
WAM Capital is focused on translating portfolio returns into a market leading, sustainable source of income for its shareholders. The company has more than a decade of increasing or steady dividends, and currently has a fully franked dividend yield of approximately 7%.
WAM Leaders
The WAM Leaders portfolio takes a much more active approach to investing in the highest quality Australian companies. The portfolio has increased 17.1% in the financial year to date, outperforming the S&P/ASX 200 Index (ASX: XJO) by 3.9%.
The portfolio's outperformance in December was driven by ASX shares in the materials and mining sector.
IGO Ltd (ASX: IGO) is an exploration and mining company producing nickel, copper and gold. Its share price ripped 45% in December following stronger nickel and copper prices, as well as the company's acquisition into the lithium sector. WAM sees the entry into lithium as one that aligns with its long term strategic plan to support the structural shift into battery storage. IGO noted that electric vehicle sales are expected to grow approximately 18% per annum through to 2030.
BHP Group Ltd (ASX: BHP) was also another significant contributor, driven by higher iron ore, oil, nickel and copper prices. WAM expects oil prices to be supported by a continued recovery in COVID-related demand such as travel and industrial production in the near term. WAM is also constructive on nickel and copper for the same reasons relating to electric vehicle sales that were noted in IGO.
