By Eli Greenblat


Geoff Wilson’s specialist large-cap fund, WAM Leaders, is pivoting towards companies down on their luck, such as Star Entertainment and James Hardie, after delivering double-digit dividend growth in the second half of the current financial year.

The Wilson Asset Management-run fund will on Monday report that its $1,609.1 million portfolio increased by 8.8 per cent in the six months to December 31 and outperformed its benchmark by 9.9 per cent over 12 months.

However, for the half year to the end of December, it underperformed the index by 1.0 per cent, which it blamed on the collapse of the Ramsay Health Care takeover deal and buying into James Hardie too early.

The board of WAM Leaders will declare a 12.5 per cent lift in the interim dividend to a record 4.5c per share, fully franked, providing an annualised fully franked dividend yield of 6 per cent and a grossed-up dividend yield of 8.6 per cent to shareholders. The company’s audited half-year results will be released to the market on February 28.

WAM Leaders, with a focus on large-cap leaders on the ASX and one of the largest listed funds in the group, believes the market is starting to look overvalued and is now on the hunt for “defensive/quality” stocks.

“As we start to get towards February and beyond, we are finding opportunities and we would characterise it as defensive-quality, that’s kind of where we’re hunting at the moment,” WAM Leaders portfolio manager John Ayoub said.

WAM Leaders is also hunting around stocks that had been “beaten up”, Mr Ayoub added.

“We have been hunting around stocks that have been really beaten up around that interest rate thematic such as Lend Lease, James Hardie, Aristocrat and for other reasons Star casino, and these are the names that we are starting to take more long-term positions in right now.

“CSL is what we are also calling out in the healthcare sector.”

WAM Leaders’ largest holdings in the December half included BHP, Commonwealth Bank, Coles and Rio Tinto.

Mr Ayoub said the fund had also benefited from an overexposure to mining stocks.


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