WAM Income Maximiser Delivers 19.2% Return and Raises Dividends Amid Capital Raise

Strong Portfolio Performance Drives Profit and Dividend Growth

WAM Income Maximiser (ASX:WMX) has clocked a standout 19.2% return on its investment portfolio for the financial year ended 30 June 2026, outpacing its benchmark by a hefty 13.4%. The benchmark blends 60% of the S&P/ASX 300 Accumulation Index with 40% of the Bloomberg AusBond Bank Bill Index plus 1% per annum. This performance was delivered with 17.1% less volatility than the ASX 300, underscoring the fund’s ability to generate smoother returns amid market uncertainty.

The portfolio’s success translated into operating profits before tax of $19.6 million, soaring from just $1.5 million in the prior period. Net profit after tax rose similarly to $14.3 million. These gains underpin a growing stream of monthly fully franked dividends, with the annualised December 2026 dividend yield reaching 7.1% including franking credits, comfortably exceeding the target income return of the Reserve Bank of Australia cash rate plus 2.5%.

Dividend Increases and Capital Management Initiatives

Reflecting its strong earnings, the Board declared monthly fully franked dividends increasing steadily from 0.63 cents per share in July 2026 to 0.68 cents in December 2026. Since inception in April 2025, shareholders have received 6.9 cents per share in fully franked dividends, including franking credits.

Capital management has been a key theme. In late 2025, WAM Income Maximiser raised over $148 million through a heavily oversubscribed placement and Share Purchase Plan, issuing nearly 93 million new shares. This capital was deployed into high-quality Australian equities and investment-grade corporate debt, aiming to sustain income and support capital growth.

More recently, the company launched a 2-for-5 pro-rata non-renounceable entitlement offer priced at $1.62 per new share, representing a 4.1% discount to estimated pre-tax net tangible assets (NTA) of $1.69 as at mid-August 2026 and a 3.6% discount to the prevailing share price. The offer closes on 21 August 2026, with results expected shortly after. Alongside this, a $47 million placement to sophisticated investors was completed amid strong demand, further boosting funds under management towards $496.5 million.

Portfolio Strategy and Market Positioning

Lead Portfolio Manager Matthew Haupt highlighted the fund’s nimble approach amid a volatile macroeconomic backdrop marked by shifting inflation expectations, geopolitical tensions, and the disruptive rise of artificial intelligence. The team tactically adjusted asset allocations, initially overweighting equities, particularly in resources and cyclicals, and floating rate, short-duration corporate debt. In the first half of 2026, they increased debt exposure and duration while pivoting equity holdings towards real estate investment trusts (REITs) and taking profits in resources stocks.

Looking ahead, the team anticipates a falling RBA cash rate in 2027 amid slowing domestic demand and disinflationary pressures. They expect long-term bond yields to decline faster than short-term rates, flattening the yield curve, a scenario historically favorable to REITs and domestic cyclicals. The portfolio is positioned to favour value stocks over growth, steering clear of markets heavily exposed to AI themes, including certain emerging markets and Australian miners.

Governance and Risk Management

WAM Income Maximiser’s governance structure includes a Board with a mix of independent and non-independent directors, including Chairman Geoff Wilson AO, who also directs the Investment Manager, Wilson Asset Management (International) Pty Limited. The company disclosed key risks including market volatility, investment strategy execution, concentration risk, and governance risks related to the Investment Manager relationship. The Investment Manager is paid a management fee of 0.88% per annum plus a 20% performance fee on returns exceeding the benchmark, with a full recoupment clause for prior underperformance.

The financial statements were audited by Pitcher Partners Sydney, who issued an unqualified opinion, confirming the accuracy and fairness of the reported results.

Outlook and Investor Considerations

As WAM Income Maximiser closes its entitlement offer and integrates the proceeds from recent capital raises, the fund’s larger capital base is expected to enhance liquidity, reduce fixed expenses, and increase its market profile. The investment team’s flexible multi-asset strategy aims to continue delivering a blend of income and capital growth with lower volatility than the broader market.

Investors will be watching how the portfolio navigates the anticipated shifts in interest rates and economic growth in 2027, and whether the fund can sustain its strong dividend trajectory amid evolving market conditions.