WCMQ ETF’s 15% Price Drop Looms Amid Record FY2025 Distribution
The WCM Quality Global Growth Fund – Active ETF (WCMQ) is set to pay a substantial FY2025 distribution, triggering an expected 15% price adjustment as it trades ex-distribution from July 1. Investors are urged to consider the Distribution Reinvestment Plan to stay fully invested.
- Estimated FY2025 distribution of $1.713591 per unit, significantly higher than prior years
- WCMQ to trade ex-distribution on 1 July 2025 with an anticipated 15% price decline
- Fund’s portfolio returned 30.22% year-to-date, outperforming benchmark by 14.18%
- Distribution Reinvestment Plan (DRP) offered to reinvest distributions cost-effectively
- Since 2018 inception, the fund has compounded at 15.95% per annum, beating its benchmark
Strong Returns Fuel Large Distribution
The WCM Quality Global Growth Fund – Active ETF (WCMQ), managed by AGP Investment Management Limited, has announced an estimated distribution of $1.713591 per unit for the financial year ending 30 June 2025. This figure marks a significant increase compared to previous years, primarily driven by realised capital gains within the fund’s portfolio.
Year-to-date, WCMQ’s portfolio has delivered a robust 30.22% return, substantially outperforming the MSCI All Country World (ex-Australia) Index by 14.18%. This strong performance underscores the fund’s effective active management strategy and its ability to generate alpha in global markets.
Ex-Distribution Trading and Price Impact
Investors should note that WCMQ will trade ex-distribution from 1 July 2025. As is standard for active ETFs, the trading price is expected to adjust downward to reflect the distribution payout. Given the sizeable distribution, the fund’s price is anticipated to decline by approximately 15% on the ex-distribution date.
This adjustment is a natural market response to the distribution event, ensuring that new investors purchasing units on or after 1 July will not receive the FY2025 distribution. The actual distribution payment is scheduled for 21 July 2025.
Distribution Reinvestment Plan Offers Continuity
To help investors maintain full exposure to the fund’s growth potential, AGP Investment Management is promoting participation in the Distribution Reinvestment Plan (DRP). The DRP allows unitholders to reinvest their distributions into additional units without incurring brokerage, commissions, or other transaction costs.
Units acquired through the DRP will rank equally with existing units, providing a seamless way to compound investment returns. Investors must elect to participate by 5, 00pm (AEST) on 3 July 2025 to take advantage of this opportunity.
Long-Term Performance and Outlook
Since its inception in August 2018, WCMQ has delivered a compound annual return of 15.95%, outperforming its benchmark by 3.64%. This performance aligns with the underlying WCM Quality Global Growth Strategy Composite, which has returned 14.73% per annum since 2008.
A hypothetical $10,000 investment at the fund’s launch would have grown to approximately $27,147 by May 2025, illustrating the fund’s consistent value creation over time.
The responsible entity will announce the final distribution amount on or before 9 July 2025, which may vary slightly from the estimate due to portfolio changes and investor activity between now and the distribution date.
Bottom Line?
WCMQ’s large distribution and ensuing price adjustment present both a challenge and an opportunity for investors aiming to stay fully invested in a high-performing global growth fund.
Questions in the middle?
- Will the final FY2025 distribution differ significantly from the current estimate?
- How will investor participation in the DRP affect unit liquidity and price stability post-distribution?
- What sectors or holdings drove the substantial capital gains contributing to this record distribution?