WAM Strategic Value Outperforms ASX Index with 9.5% Portfolio Gain and Raises Dividend

Portfolio Performance Surpasses Market Benchmarks

WAM Strategic Value Limited (ASX:WAR) posted a 9.5% increase in its investment portfolio for the 12 months ending 30 June 2026, outperforming the S&P/ASX All Ordinaries Accumulation Index by 3.8%. This marks a continuation of strong returns, with annualised gains of 9.1% and 12.2% over the past two and three years respectively. Since its inception in June 2021, the portfolio has delivered a 7.2% annualised return.

The portfolio’s outperformance was primarily driven by holdings in listed investment companies (LICs) and trusts (LITs) with exposure to global equities, reflecting Wilson Asset Management’s focus on discounted asset plays and corporate activity within the LIC/LIT sector.

Dividend Raised Amid Operating Profit Growth

The board declared a fully franked full year dividend of 6.5 cents per share, an 8.3% increase from the 6.0 cents paid in FY2025. The final dividend of 3.25 cents per share maintains the fully franked status, translating to a grossed-up dividend yield of 8.4% when including franking credits. This yield is notable in a low-yield environment and underscores the company’s commitment to delivering income alongside capital growth.

Operating profit before tax rose to $14.3 million, up from $12.4 million in the prior year, while after-tax profit increased to $12.7 million. These figures indicate solid financial health and effective portfolio management.

Cash Holdings and Discount to Net Tangible Assets

Reflecting a cautious stance amid market volatility, WAM Strategic Value held 28.8% of its portfolio in cash and equivalents at year-end. This liquidity positions the company to capitalise on emerging discounted investment opportunities selectively, a strategy emphasised by Chairman and Lead Portfolio Manager Geoff Wilson AO.

At 30 June 2026, the company’s pre-tax net tangible assets (NTA) stood at $1.25 per share, while the look-through pre-tax NTA; accounting for the underlying net asset values of portfolio holdings; was $1.43 per share. Despite this, the share price traded at a 24.8% discount to the look-through NTA and a 14.1% discount to the pre-tax NTA, with a 12.1% discount persisting at the time of the announcement. This significant discount highlights ongoing market scepticism or liquidity constraints affecting closed-end funds like WAR.

Portfolio Composition and Investment Approach

The top 20 holdings reveal a diversified exposure dominated by Regal Partners Global Investments (16.9%), Pengana International Equities (13.0%), and WAM Global (9.6%), among others. Notably, WAM Strategic Value received WAM Global shares as scrip consideration, with Wilson Asset Management foregoing management fees on that portion, indicating alignment of interests.

Wilson Asset Management’s disciplined capital allocation, combined with substantial liquidity, enables WAR to navigate periods of uncertainty while seeking risk-adjusted returns. The company’s strategy centres on exploiting share price discounts to intrinsic asset values within the LIC and LIT sectors, a niche that has delivered consistent outperformance.