The Weekly | Geopolitical uncertainty, WAM Income Maximiser’s first full year result and opportunities AI infrastructure

The Big Picture

Australian shares finished the week 0.3% lower. After trading in positive territory earlier in the week, the S&P/ASX All Ordinaries fell 0.6% on Friday, led by declines in major mining stocks as investors weighed softer commodity sentiment, higher oil prices and ongoing geopolitical uncertainty.

Geopolitical developments remained the key driver of sentiment, with oil prices rising sharply as tensions between the US and Iran escalated and energy supply risks came back into focus. Most US equity indices finished the week lower, with weakness in semiconductor and artificial intelligence (AI)-linked stocks weighing on the S&P 500 and Nasdaq, while energy stocks were supported by the rise in oil prices. The US reporting season also got underway, with several major banks releasing results that generally exceeded consensus expectations.

Consumer inflation slowed considerably in June, with the Bureau of Labor Statistics reporting that the Consumer Price Index (CPI) fell 0.4% month-on-month, reducing expectations of a near-term Federal Reserve rate rise. The decrease was the largest since April 2020 and was driven by a 5.7% drop in energy prices.

Looking ahead, investors will focus on Australia’s June labour market report, with employment expected to have increased by 15,000 and the unemployment rate forecast to remain unchanged at 4.4%. Offshore, attention will remain focused on developments in the Middle East and the direction of oil prices. Markets will also be watching the US reporting season, with several large technology and semiconductor companies due to report. Other key events include US Purchasing Managers’ Index (PMI) data, which provides an indication of manufacturing and services activity, alongside the European Central Bank’s interest rate decision, UK inflation data and Japan CPI data.

WAM Income Maximiser: +19.2% investment portfolio performance and growing monthly fully franked dividends

The WAM Income Maximiser (ASX: WMX) investment portfolio increased 19.2%¹ in the financial year to 30 June 2026, outperforming its benchmark by 13.4%. The investment portfolio performance was achieved with 17.1% less volatility² than the S&P/ASX 300 Accumulation Index.

During FY2026, WAM Income Maximiser paid shareholders 6.9 cents per share in fully franked dividends, including the value of franking credits. The Board has also declared increasing monthly fully franked dividends of 0.63 cents per share for July, 0.64 cents per share for August and 0.65 cents per share for September 2026.

The annualised September 2026 fully franked dividend yield on the average pre-tax net tangible assets (NTA) in the 12 months to 30 June 2026 is 6.9%³, including the value of franking credits, exceeding the target income return. The average target income return in the 12 months to 30 June 2026 was 6.3%⁴. Since inception in April 2025, the investment portfolio has increased 17.8%¹ per annum, outperforming its benchmark by 7.6% per annum, with 25.9% less volatility² than the S&P/ASX 300 Accumulation Index.

You can read the media release here.

Register for the WAM Income Maximiser FY2026 Full Year Results Q&A Webinar, being held at 2:00pm Sydney time on Thursday 30 July 2026, here.

WAM Active FY2026 Full Year Result

We also released WAM Active’s (ASX: WAA) FY2026 results last week, with the investment portfolio delivering a record +75.5%⁴ return and outperforming the Bloomberg AusBond Bank Bill Index (Cash) and the S&P/ASX All Ordinaries Accumulation Index by 71.6% and 69.8% respectively. This performance supported total fully franked dividends of 9.4 cents per share for FY2026, including special dividends and a record total shareholder return of 40.2%.

You can read the media release here.

The result was covered by The Australian Financial Review, The Australian and Livewire Markets.

Register for the WAM Active FY2026 Full Year Results Q&A Webinar here.

WAM Global (ASX: WGB) Portfolio Manager William Liu provides his perspective on the recent pullback in semiconductor stocks, the underlying strength of the artificial intelligence infrastructure build-out and the selective opportunities emerging across the power, semiconductor and hardware sectors. 

“Semiconductors experienced a sharp pullback at the beginning of this financial year. The Philadelphia Semiconductor Index, which had gained almost 65% over the previous six months, subsequently fell almost 21% from its peak, reflecting a significant unwind in momentum. We saw institutional profit-taking, jitters over AI valuations and a sector rotation, as macroeconomic factors, including rising oil prices and renewed geopolitical friction, triggered a broad shift out of high-flying technology hardware stocks and into defensive and lagging sectors.

This has been a positioning and leverage unwind rather than a deterioration in fundamentals. The AI infrastructure build-out remains intact, and we continue to see strong demand signals, including hyperscalers increasing capital expenditure, positive guidance from foundries and semiconductor equipment companies, rising memory pricing and growing multiyear backlogs. In fact, two of our portfolio holdings, TSMC (TWSE: 2330) and ASML (NASDAQ: ASML), both reported strong earnings results that beat expectations and pointed to accelerating structural demand.

Within the WAM Global investment portfolio, we have selectively invested in the AI infrastructure build-out through selected companies across the power, semiconductor and hardware sectors. Consistent with our discipline of buying undervalued growth companies, we had already trimmed some of our winners ahead of this sell-off, including exiting Marvell Technology (NASDAQ: MRVL) and reducing our position in Quanta Services (NYSE: PWR), as we believed valuations had started to reflect increasingly optimistic scenarios, leaving a smaller margin of safety. We continue to view artificial intelligence as a secular growth opportunity, and believe this volatility creates an attractive opportunity to add to companies whose valuations have become more reasonable.”

Stock Watch

Ampol (ASX: ALD) is Australia’s leading transport fuels business, supplying fuel and convenience products through its national retail network, while also refining, importing and marketing fuels and lubricants. The company has strengthened its retail platform through the acquisition of EG Group Australia, adding scale and creating further opportunities to improve the store network over time.  We continue to like Ampol given its improved earnings base and exposure to refining margins, which have been supported by recent oil price moves as conflict has escalated in the Middle East.  With refining conditions remaining supportive and the retail platform now stronger, we remain positive about the company’s outlook.

Meta Platforms (NASDAQ: META) owns Facebook, Instagram, WhatsApp and Messenger. It operates one of the world’s largest digital advertising businesses, second only to Alphabet (NASDAQ: GOOG), with advertising serving as the primary driver of earnings. Artificial Intelligence (AI) is enabling more targeted and effective advertising, and Meta is well positioned to capitalise on this capability, given the proprietary generated by its 3.5 billion daily active users. The scale of the company’s AI-related capital expenditure has weighed on investor sentiment, but the recent launch of Muse Spark, Meta’s in-house frontier model, signals a strategic shift towards monetising AI beyond its core advertising business. As a recent addition to the WAM Global investment portfolio, we believe the market underappreciates the company’s ability to improve returns on investment and expect further product launches to act as catalysts for the stock.

Register for the Future Generation HY2026 Interim Results Q&A Webinars​​​​

Index returns performance table​​​​​​