WCM Investment Management claims to offers investors overseas growth and a 3.5% yield

WCM Investment Management claims to offer ASX investors overseas growth and a 3.5% yield

An LIC like WCM Investment Management (ASX:WQG) offers exposure to some of the world's best share market companies.

Tom Richardson

Tom is a holder of the CFA Society of the UK administered Investment Management Certificate (IMC) and has more than a decade's professional experience in the investment management industry in Australia and the UK. Tom now works as a writer and editor for TMF Australia and has two easy to remember rules of investing he likes to follow. Avoid overpaying for growth stocks and avoid paying at all for stocks that are cheap for a reason. Tom prefers growth investing over value investing and says it's not rocket science, just avoid overpaying for the best returns.

Published May 21, 2019 8:22 am AEST

A lot of share market investors will be torn between chasing growth investments that tend to carry a little more risk for potentially higher returns or income shares that provide reliable dividends.

Ideally you'd want the best of both worlds and the former Contango Asset Management has listed its ASX exchange-traded WCM Global Growth Limited Fund (ASX: WCMQ) as a potential option to tick the boxes of overseas exposure and growth.

The fund is actively run by California-based stock pickers WCM Asset Management and offers ASX investors good diversification via exposure to some of the world's leading companies.

Since its inception on 31 August 2018 the fund has returned an average 9.61% per annum (after base management fees of 1.25% and any additional performance fees) versus 3.97% for the MSCI benchmark. This is some decent outperformance, albeit over a short timeframe.

According to its website WCM Asset Management looks for companies that boast rising competitive advantages alongside strong corporate cultures. In total it manages around A$49 billion across all its funds and can therefore be taken as an established manager with a proven track record.

Given its investment philosophy to find companies with widening moats, it's no surprise to see that the fund's largest holding is digital payments giant Visa Inc, with other well-known names such as CostCo, Tencent and Shopify also among its top 10 holdings. In total companies in the healthcare, IT and financial services sectors make up around 60% of the portfolio.

Notably, WCM Investment Management (ASX: WQG) is also now listed on the local market as a listed investment company for a number of funds it operates under the WCM umbrella. It also has partnerships with well-known business commentator Peter Switzer and his new Switzer Financial Asset Management Group.

The LIC trading under the ticker WQG has also boasted of its intention to pay 4 cents per share in dividends over FY 2020 meaning it offers a yield of 3.6% based on today's price of $1.12. However, investors should remember these are just forecasts and not set in stone.ASX

Like many LICs, WQG also currently trades at a discount to its underlying net tangible assets (NTA), with the shares closing at $1.12 on Monday but the net tangible assets per share as at May 14 standing at $1.298. There is the possibility this valuation gap closes, but it's not unusual for an LIC to trade at a discount to its NTA for any number of reasons.

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