Hi Maureen,
WAM is a listed Investment Company (LIC) whereby they buy and manage a portfolio of stocks and charge a fee for doing it. They pay dividends at an attractive and growing rate, most of this is a passthrough of income & profits received into the portfolio, however at times they dip into capital to smooth out the rate of return for loyal holders. An LIC can trade at, below or above the value of their underlying portfolio. Most trade below, however WAM trades at a premium for a few reasons, but ultimately we call this the ‘Geoff Wilson effect’.
The share price today is $1.70 versus their last published NTA of $1.41 as at the end of September. While markets have rallied, the NTA is unlikely to have risen by 20% – We struggle to pay a premium above the value of their portfolio to get exposure to an LIC, however we certainly hand it to Geoff and co for creating such a well supported investment vehicle.
VG8, which has recently been taken over by Regal is trading at a 14% discount. That has happened because of weak performance over extended periods of time, however Regal is now the manager and I suspect will be aggressive in closing that gap with NTA. Regal is very bullish on commodities which no doubt has fared well in recent times. We prefer VG8 in the LIC space, and of course, we always think it is worth considering Market Matters Invest