This fund has just declared a special dividend after "record outperformance"

The WAM Active Ltd (ASX: WAA) fund has announced an increased interim dividend and a new special dividend after chalking up a return of 41.4% for the year to the end of December.

The fund, which is part of well-known fund manager Geoff Wilson's stable, will pay a fully-franked interim dividend of 3.2 cents per share, up from 3 cents previously, plus a special dividend of 1 cent per share to be paid mid-year, leading to a grossed-up dividend yield on an annualised basis of 9.3%, the fund said on Tuesday.

Historically strong figures

Mr Wilson said in a statement to the ASX that the six-month performance of the fund's portfolio for the second half of the calendar year was "the strongest for WAM Active since inception 18 years ago''.

He went on to say:

WAM Active's proven and flexible investment strategy, coupled with the expertise of the investment team and the dynamic portfolio construction continues to deliver excellent investment portfolio performance for shareholders.

Plenty of room to grow

WAM Active Deputy Portfolio Manager Shaun Weick said the team had been trading actively to take advantage of opportunities.

He said further:

Over the past six months, we have materially increased portfolio turnover to take advantage of the opportunities we see in the market, whilst at the same time actively managing the cash position to cushion downside exposure. In recent weeks we have seen a material shift in domestic investor sentiment as the outlook for inflation and interest rates has been reassessed higher. Accepting this adjustment, we expect the upcoming February reporting period should provide compelling trading opportunities.

Mr Weick said the WAM Active team was watching the metals markets in particular.

WAM Active has progressively rotated positioning towards precious and base metals as we believe these companies are well positioned for near term outperformance as the US continues to reduce interest rates, global growth improves and the USD moves lower. We believe this environment warrants an active approach to portfolio construction which positions the fund well. Whilst capital markets activity has generally improved this year, the performance of recent IPOs suggest caution is warranted in this respect. Overall, we remain optimistic on the outlook for markets into 2026 and are excited by the opportunities that could present over time,

WAM said the fund beat the performance of the S&P/ASX All Ordinaries Index (ASX: XAO) by 30.8% over a 12-month period.

WAM Active shares were 5.1% higher on the positive performance news on Tuesday, changing hands for $1.04 apiece.

The ex-dividend date for the interim dividend is May 15, while the ex-dividend date for the special dividend is June 17.

The post This fund has just declared a special dividend after "record outperformance" appeared first on The Motley Fool Australia.

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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