WAM Capital has posted a 176.9% increase in operating profit after tax to $70.4 million for its FY2020 half year results.
The firm said in an announcement to the Australian Securities Exchange (ASX) the large jump in profit was reflective of its “solid investment portfolio performance over the period”.
WAM’s investment portfolio increased 8.9% during the period and outperformed the S&P/ASX All Ordinaries Accumulation Index by 5.3% with an average cash level of 20.1%.
The firm’s lead portfolio manager, Oscar Oberg, said WAM’s focus on identifying undervalue growth companies yield solid portfolio performance during a six-month period when the Australian economy faltered and geopolitical tensions were fluctuating.
“Pockets of the domestic economy showed weakness following strong performance in the August reporting season, affecting sectors such as retail and automotive, while others, such as mining services and housing exposed companies, showed promise,” Oberg said.
“We positioned the portfolio to take advantage of this, investing in companies that demonstrated a strong growth potential, solid management and a catalyst to drive the share price higher.”
WAM’s investment portfolio had its highest sector allocation to consumer discretionary (20.8%), financials (19.2%), cash (17.1%), industrials (12.5%), information technology (10.1%), and materials (8.3%).
Its top stock weightings were Brickworks (2.9%), Seven Group Holdings (2.5%), Pengana International Equities (2.1%), and Kogan.com, Templeton Global Growth Fund, Austal, Service Stream (all at 2%).