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Listed investment vehicle WAM Active (ASX: WAA) has delivered a dividend windfall to investors thanks to a portfolio outperformance in the December half that boosted returns over calendar 2025 to 41.4 per cent.
The bumper annual returns were largely driven by a 31.4 per cent increase in returns over the last six months of the year, which WAM Active says is its strongest half-year performance since inception 18 years ago.
WAM Active, which is managed by Wilson Asset Management and has about $6 billion in funds under management, largely targets undervalued ASX listed companies with the aim of achieving high returns with low volatility.
More recently, the investor has turned its focus towards base metals and precious metals producers which it forecasts as potential near-term outperformers in the market.
WAM Active notes that its investment portfolio last year outperformed the Bloomberg AusBond Bank Bill Index (Cash) and the S&P/ASX All Ordinaries Accumulation Index in both the 12-month and six-month periods by 37.4 per cent and 29.6 per cent, and 30.8 per cent and 27 per cent, respectively.
“This exceptional performance, along with the strong performance of the company over the last 12 months has enabled the board of directors to declare an increased fully franked interim dividend of 3.2c per share and a special fully franked dividend of 1c per share,” says WAM Active chairman Geoff Wilson.
“WAM Active’s proven and flexible investment strategy, coupled with the expertise of the investment team and the dynamic portfolio construction, continues to deliver excellent investment portfolio performance for shareholders.”
The latest dividends represent an annualised fully franked interim dividend yield of 6.5 per cent and a grossed-up dividend yield of 9.3 per cent, including the value of franking credits.
According to the company’s latest update in November, it lists Web Travel Group (ASX: WEB), Eagers Automotive (ASX: APE), Cedar Woods Properties (ASX: CWP), ALS Ltd (ASX: ALQ), and The A2 Milk company (ASX: A2M) among its top 20 holdings.
WAM Active’s lead portfolio manager Oscar Oberg says the 2025 performance was aided by improved capital markets activity which “supported a more dynamic approach toward portfolio construction".
He says this enabled the WAM Active investment team to “capitalise on trading opportunities that fit within our investment process including earnings updates, merger and acquisition activity and other corporate activities”.
Deputy portfolio manager Shaun Weick says that over the past six months, WAM Active materially increased portfolio turnover to take advantage of opportunities in the market while actively managing the cash position to “cushion downside exposure”.
“In recent weeks we have seen a material shift in domestic investor sentiment as the outlook for inflation and interest rates has been reassessed higher,” says Weick.
“Accepting this adjustment, we expect the upcoming February reporting period should provide compelling trading opportunities.
“WAM Active has progressively rotated positioning towards precious and base metals as we believe these companies are well positioned for near term outperformance as the US continues to reduce interest rates, global growth improves and the USD moves lower.”
Weick says this environment warrants an “active approach to portfolio construction”, adding that this positions the fund well.
“Whilst capital markets activity has generally improved this year, the performance of recent IPOs suggest caution is warranted in this respect,” he says.
“Overall, we remain optimistic on the outlook for markets into 2026 and are excited by the opportunities that could present over time.”
WAM Active shares were trading 5c higher at $1.04 at 11.44am (AEDT).
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