Attempts to avoid the proposed tax on the earnings of super balances above $3 million or land taxes could leave self-funded retirees exposed to back-dated claims and ATO audits.
A weakness of the super sector is the number of funds that take DIY literally and shun professional input. But this might be changing as a growing number of new funds reach out for a helping hand.
WAM Capital shareholders benefit from portfolio outperformance
Shareholders in the independently owned investment manager WAM Capital (ASX:WAM) have received 7.75 cents a share dividend for the six months to June 30, 2024. Of this amount, 60 per cent was franked (4.65 cents a share), reflecting its corporate tax rate of 30 per cent, with the remaining 3.1 cents unfranked.
On the same day the dividend payment was made, October 31, participants in its dividend reinvestment plan (DRP) – the price was set at $1.51946 a share – received their new securities.
This price was determined using the volume-weighted average price (VWAP) of WAM shares traded on the ex-dividend date and the three subsequent trading days. Shareholders had to confirm their participation by October 24.
Under the DRP, shareholders could reinvest their dividend earnings into additional shares instead of receiving a cash payout. The plan did not offer a discount on the reinvestment price, and those who opted out of the plan received their dividend payment in cash.
WAM Capital chairman Geoff Wilson said the dividend distribution reflected its ongoing commitment to provide returns to shareholders while offering flexibility through a reinvestment plan.
WAM has traded between $1.40 and $1.68 over the past year (see graph below).
The DRP and dividend payout follows a strong result by WAM for the 12 months to June 30, 2024, with its investment portfolio increasing 26.4 per cent, outperforming the S&P/ASX small ordinaries accumulation index by 18.1 per cent and the S&P/ASX all ordinaries accumulation index by 13.9 per cent.
Shareholders were rewarded with a full-year dividend of 15.5 cents (60 per cent franked), with WAM expecting the 2025 full-year dividend also to be franked to 60 per cent if the 15.5-cent dividend can be maintained.
Commenting on WAM’s 2024 financial year performance, lead portfolio manager Oscar Oberg (pictured) said that despite the ongoing macroeconomic headwinds that had continued to prevail since the 2020 coronavirus pandemic, the WAM investment portfolio – consumer discretionary, industrials, financials and information technology comprise nearly two-thirds of the portfolio – experienced its strongest year of outperformance since 2016.
“The team capitalised on emerging themes, such as the rise of artificial intelligence (AI), which benefits small-cap technology companies. As active managers our bullish stance on the consumer sector also contributed to investment portfolio returns. We made significant gains from retail companies where market earnings expectations were low.”
He said that stock picking from the team successfully applied its investment process to identify quality, undervalued growth companies across various sectors.
“Historically, when market conditions shift in favour of smaller sized companies, the turnaround is often swift and significant, and we’re in an excellent position to capitalise on these market opportunities.”
