WAM Leaders Limited

WAM Leaders Limited (WLE) is an Australian Listed Investment Company (LIC) listed on the Australian Stock Exchange (ASX) with the ticker code WLE. Established in 2016, WLE has been actively managing shareholder funds for 7 years. The company specialises in Australian equities, focusing on large-cap companies listed on the ASX with compelling fundamentals.

With a market capitalisation of approximately $1.7 billion, WAM Leaders Limited is a significant player in the Australian LIC landscape. Its investment strategy aims to deliver a stream of fully franked dividends, provide capital growth over the medium-to-long term, and preserve capital.

WAM Leaders Limited (WLE) has been operating for 7 years, which makes it a relatively young LIC in the Australian market. Despite its shorter operating history, it has gained attention from investors seeking exposure to large-cap Australian equities.

Currently, WAM Leaders has a market capitalisation of approximately $1.7 billion, signifying its presence as a sizable LIC with a focus on large-cap companies with compelling fundamentals.

When evaluating WAM Leaders Limited (WLE) as an investment choice, consider these key metrics:

• Long-term performance: Examine WLE's long-term performance by comparing its returns to its benchmark, the S&P/ASX 200 Accumulation Index, over a period of 5 years or more.
• Dividend reliability: WAM Leaders aims to provide a stream of fully franked dividends. Evaluate its track record of dividend payments and consider the net and gross dividend yields, which indicate both the cash dividend and the franking tax credits attached.
• Underlying holdings: Understand the portfolio composition of WAM Leaders. It actively manages a portfolio of ASX listed large-cap companies with compelling fundamentals. Reviewing its holdings can provide insights into its investment strategy.
• Fees: Take into account the cost of investing in WAM Leaders. The Management Expense Ratio (MER) is an important metric, and WLE's MER is calculated at 1.62% in th emost recent financial year.

A Listed Investment Company (LIC) is one type of investment fund structure (i.e. shareholder funds pooled together and invested together, either actively by a manager, or passively). Other types of investment funds include Exchange Traded Funds (ETFs) (which can be both actively managed or passive), Listed Investment Trusts, or Managed Funds.

The different structures have their own positives and negatives, which are dependent on the goals of the investor and their own individual investment structure.

Some of the benefits of the LIC structure (the structure of WLE) include:

• It's a closed-end investment vehicle: Meaning the manager has a fixed pool of capital to invest with a long-term mindset, and doesn't have the risk of fast redemptions by investors in a time of market panic.
• They can smoothen out income to the investors: Which can be beneficial for both tax efficiency and emotional mindset, due to being able to retain profits over time (as compared to the trust structure, which must distribute income and crystallized capital gains to the investor in that financial year).
• The income will most likely be in the form of fully franked dividends: Which is an attractive form for Australian retirees due to the franking system in Australia. Since LICs are companies themselves and pay tax in Australia on profits, they receive franking credits paid on the tax they pay, in addition to the franking credits they receive from their investment portfolio. Well-managed LICs ensure their franking credit reserves are sufficient to pay future fully franked dividends (see 'franking reserves' chart above).