Wilson AM to launch first monthly LIC strategy

The new listed investment company (LIC) will provide investors with a monthly income stream and capital growth with "less risk" once launched on the Australian Securities Exchange (ASX) on April 30.

The WAM Income Maximiser (ASX:WMX) aims to provide monthly franked dividends and capital growth by investing in 40-70 equities and corporate debt instruments - the first Australian LIC to do so, Wilson Asset Management (WAM) said.

The portfolio will consist of companies with the ability to grow and sustain distributions over time in the form of franked dividends and strong capital management.

The strategies will have a medium-to-long-term horizon of over five years and will require a minimum initial investment fee of $1500 at $1.50 per 1000 shares.

Its capital raising is limited to $510 million, with $180 million allocated to WAM's existing shareholders.

It is expected to close on April 11.

Further, the strategy will be led by lead portfolio manager Matthew Haupt and portfolio strategist Damien Boey.

Haupt said there was significant interest in the strategy since lodging the prospectus to ASIC last week.

"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," Haupt said.

"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... [and] helps reduce volatility while broadening the equity universe beyond a traditional dividend-harvesting strategy."

WAM chair Geoff Wilson added that WMX capitalises on the "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 said.

The LIC will target the Reserve Bank of Australia's cash rate plus 2%, aiming to return over 6% per annum including franking credits.

WMX is the ninth LIC in WAM's suite.