Ann: December 2022 Investment Update, page-32

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01/02/23

17:30

Post #: 66012435
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Originally posted by George89: ↑

The challenge for WAM and any listed investment company is share selection. I originally bought into WAM as I found it difficult to make much out of small and medium cap shares, and at that point WAM seemed to do it well. The reality is in any portfolio, you will have a couple of good winners, a larger portion of average returns and a few losers you need to move on from. Most of the profit is made from a the winners. But if you go for a couple of years of no good winners, the dividend pool disappears along with franking credits. So WAM then did a few take overs of other LICs trading below NTA to make some money and get some more franking credits. On paper they did ok out of these take overs, but the NTA is still deteriorating, telling us they cannot pick a winner. Fundamentally the share selection is not working, and some of the performance incentives for management such as performance bonuses for increasing market cap results in taking the LIC takeovers rather than fixing the share selection issues. Small and medium cap shares is a challenging area to trade in and it appears WAM is struggling with the basics since the covid impact. They need to change something in the share selection area. I hope they fix it as retirees have held WAM for a long time for the dividends, and they were the leaders for a while. My preference now is PL8 with monthly dividends, no performance incentives, and mainly large cap shares. WLE is probably a better prospect as well, and VHY is good as well. I hold PL8, VHY but not WLE.

George

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Is there much overlap with PL8, VHY and WLE?

WAM Price at posting: $1.49 Sentiment: Hold Disclosure: Held
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0 Great analysis

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