WAM Microcap (WMI) H2 2025 earnings summary

Executive summary

• All funds outperformed their benchmarks in FY2025, with WAM Capital and WAM Research exceeding the Ordinaries Index by 9% and 9.2%, and the Small Ordinaries Index by 9.9% and 10.1%.

• WAM Microcap outperformed the Small Ordinaries Index by 6.5%; WAM Active delivered a 26.4% portfolio return.

• Investment portfolio delivered an 18.8% return for FY2025, outperforming the S&P/ASX Small Ordinaries Accumulation Index by 6.5%.

• Outperformance achieved for the eighth consecutive year since inception in 2017, with a portfolio return of 16.3% per annum since inception.

• The investment process remains focused on undervalued growth companies with catalysts for re-rating.

Financial highlights

• WAM Active returned 26.4% for the year; strong dividend yields across all LICs (9–11% grossed-up).

• Fully franked full year dividend of 10.6 cents per share declared for FY2025, with a final dividend of 5.3 cents per share.

• Fully franked dividend yield of 6.6% and grossed-up yield of 9.4% for FY2025.

• Pre-tax NTA at 30 June 2025 was $1.43 per share.

• Since inception, 100.1 cents per share in fully franked dividends paid, representing an average yield of 8.5% on IPO price and 12.1% grossed-up.

Outlook and guidance

• Positive outlook for small caps, expecting continued outperformance as interest rates fall and economic indicators improve.

• Expectation of declining interest rates in FY2026, anticipated to boost capital markets activity and investor confidence.

• Cash levels at 12% provide flexibility for new opportunities; deal and IPO activity is accelerating.

• Small caps seen as attractively valued relative to large caps, with stronger earnings momentum.

• Guidance for maintaining current dividend levels requires ~15% pre-fee returns annually.