Wilson AM launches new LIC to bridge impending bank hybrid gap

Wilson Asset Management has unveiled a new listed investment company (LIC) seeking to offer investors steady monthly income stream and capital growth with less risk exposure.

The WAM Income Maximiser (WMX) provides exposure to ‘high-quality’ equities and corporate debt, targeting returns of the Reserve Bank of Australia (RBA) cash rate plus 2.5 per cent.

The launch follows in the wake of the Australian Prudential Regulation Authority’s (APRA’s) announcement late last year that it would commence the process to phase out Additional Tier 1 (AT1) capital instruments, including bank’s hybrid bonds.

“The launch of WAM Income Maximiser addresses what we see as a critical gap in the Australian equity market, particularly where recent changes to abolish ‘bank hybrids’ have significantly reduced sources of franked income and an avenue of diversification for Australian retail investors,” Wilson Chairman, Geoff Wilson, said.

The fund will be managed by lead Portfolio Manager, Matthew Haupt, and Portfolio Strategist, Damien Boey.

“Since lodging the prospectus, we have received significant interest in the strategy,” Haupt said.

“WAM Income Maximiser’s offering is unique in the Australian landscape and will provide retail investors with access to wholesale income markets they are typically unable to access. We have had more investors register to attend the Q&A webinar than any other webinar in our 27-year history.

“The WAM Income Maximiser portfolio will consist of an actively managed selection of high-quality, cash-generating stocks, complemented by a core allocation of investment-grade bonds. This multi-asset approach helps reduce volatility while broadening the equity universe beyond a traditional dividend-harvesting strategy.”