WAM Global Limited (WGB.XA) Earnings Call Transcript & Summary

Good morning, and welcome to the FY 2025 Full Year Results Webinar for WAM Global. This is your company, and we're pleased to provide you with an update and the opportunity to ask us questions. I'm Catriona Burns, Lead Portfolio Manager for WAM Global. With me today is Nick Healy, Portfolio Manager, William Liu Deputy Portfolio Manager, Will Thompson, Investment Analyst and Olivia Harris from our Corporate Affairs team who will be facilitating the Q&A. Before we begin, a disclaimer is displayed on screen. What we talk about today is general in nature and should not be considered financial advice. In terms of the format for today, I'll start by running through the FY 2025 results. before the team and I discuss recent insights. We've been on the ground in every region around the world. talking to hundreds of companies post reporting season and conference season across the world. So we have lots of insights there. And then we'll turn to Q&A, and we'll answer any of your questions. I'd like to perhaps lead off by just -- we've got a slide up in terms of shareholder presentations that we have coming in Newcastle, Gold Coast [ to Wombat and Nusa]. We'd love to have you join us. So please come along if you can. Now let's turn to the results themselves for the year to 30 June FY '25. We were very pleased with the results. The fund itself was up 19.4%, which was ahead of MSCI World and MSCI Small Mid index. In terms of the share price, we did see it go from $2.21 at the end of 30 June 2024 to $2.50 at the end of 30 June 2025. And when you put in the interim final dividends and franking, that did get to a total shareholder return of 22.1% which we think is a pleasing result. When we look at the dividends, you can see there on the chart, we have -- we did pay a $0.065 interim, $0.065 final. And then we're very pleasingly able to pay a $0.04 special dividend in July because of the accumulated profit reserves and franking. So pleasingly, all those dividends were fully franked, and that dividend yield equated to fully franked to 5.2%, grossed up 7.4%. And when you include the $0.04 special dividend, 6.8% and gross up 9.8% dividend yield. So very pleasing from that front, both from a capital standpoint and then when you include the dividends. The next chart there is the dividends that we've paid since inception of the fund. Super pleasingly, we've paid over 200 -- we paid $296.4 million out in dividends. which equates to $0.0914 a share in dividends and franking credits. So really got to add that on to the share price that you see. I would highlight that we have had a really concerted effort in terms of the discount campaign. Since January 2025, the discount that the share price was trading at was at 18%. And pleasingly, today, it's about basically at NTA, hovering between a 1% discount and about NTA. So we have brought in that discount. It's been a really concerted efforts, as I said, I mean, core to what Wilson Asset Management does is shareholder engagement. And so we love exactly events like this where we're engaging with you, giving the opportunity to ask us questions. We've had -- we've run call campaigns this year. We've done ASX Investor Days. We've had an increased focus on promoting the team and we think it's super pleasing, as I said, to broaden that discount from that 18% to around NTA today. With that, why don't I turn to some of the insights that the team and I have realized from traveling around the world. As I said, since 30 June, we've seen hundreds of companies, and I was over last -- in the last couple of weeks over in the U.S. And with Will Thompson, Will Liu, who's over in New York with Will Thompson right now has just come back from Europe, and Nick has been in Japan and China. So yes, we've seen lots of companies across the various different regions of the world. From my perspective, in terms of the U.S., it was really interesting, I attended a global retail conference, which was timely given all the tariff announcements, attended a Tech Telecom Conference in New York. So both those in New York and then headed over to San Francisco for one of the biggest global tech conferences of the year over there. And very interesting feedback in terms of particularly in tech land. It is all about AI still, that AI infrastructure layer spend is enormous, and you have seen that through the big tech companies results no announcements of CapEx investment that's going on and really building out that infrastructure layer to enable AI to reach its full potential in terms of the technological breakthroughs there. It was, as I said, like in tech land. It is all right now that hardware and infrastructure layer. We do think the next leg will be the allocation layer. From the hardware side, we think we've got a really well exposed portfolio through Google we think we spoke to senior engineering members of the team there, and we think it's really unique in terms of what they've got from the silicon through to the agents, the tools and we think they're extremely well positioned there. We saw other companies that we hold in the portfolio like S&P, like Intuit I mean, Intuit is a great example of, we think, a AI exposure that's sort of unappreciated. Last week, they had their Capital Markets Day. They've sort of laid out the path to over 20% earnings growth out to 2030, and they really are -- have in-built AI into everything that they're doing. So we think -- we've got lots of great exposures in the portfolio to that thematic. And we do think there's another leg to come there and that some of the exposures that we have that have yet to fully benefit we'll see that come through in the future. In the not-so-rosy end of the market, I guess, housing is an area which is interesting in the U.S. You do have a significant amount of people locked into very low-rate mortgages. So housing turnover is very low at the moment. And you've seen a lot of companies there that are talking about pressure in the housing market. But what is -- what's interesting on that is that we actually think going forward that will be creating a future supply problem. So look, we've waited in there and have had exposures in the portfolio that will benefit as mortgage volumes come back. But we think going forward, there will be additional opportunities in that area. But it is -- at the moment, it is bouncing on the bottom. And so yes, not quite as rosy today as areas like AI. The other interesting area was the consumer. As I said, I attended a global retail conference and caught up with a number of companies in that space. And it's interesting. The tariffs are clearly working their way through. And so you've got retailers trying to work out how to navigate that. And with the view, I guess, if you say how should they adjust their business. It's been are the tariffs going to stay? Or are they going to be pulled? And so you've seen a mix of initiatives with trying to go back to their suppliers to negotiate new terms. They have in some parts increase price, but it's not that easy when you -- if you're exposed to a low-end consumer that's already under pressure from inflation, that is a tougher ask. So for us, we haven't had big exposure to the consumer in the portfolio we have chosen -- we do think it's -- you have needed to choose very selectively your exposures. And where we have had exposure, it's been to areas like online sports betting opening up in the U.S. And we've seen those companies -- we've owned the data providers there such as Genius Sports and Sport Radar, and I caught up with both of those in New York and they're just seeing enormous demand as that opens up as it's legalized across the U.S. And so as I said, the consumer, it's very mixed. You need to have pricing power, differentiation to really win right now. And so as I said, our exposures in areas like online sports betting, where you've got and opening up market. You've got considerable tailwinds, we think, are a great way to have exposure to the consumer without necessarily getting in the way of tariffs and companies trying to work through that headwind. With that, I've spoken a lot...

Just yes that was additionally the mortgage market returning.

Yes, absolutely. Yes, that's a good point. In terms of as I put it out on the housing side, good point, Nick. In terms of exposures, we have there, we do -- we've owned Intercontinental Exchange, which owns the end-to-end mortgage platform. So as mortgage volumes recover Intercontinental Exchange will benefit there but it is a well-diversified business. So it isn't just a play on mortgage volumes. And the other exposure that we have in the portfolio is TransUnion, which again is one of the key credit bureaus in the U.S. and again, will benefit from mortgage volumes returning is derisked in terms of numbers because they've basically pulled out any assumption of a return of volumes right now. Good point. Thank you. So with that, why don't I hand over to Will Thompson, who is over in New York and then we'll pass on to Will Liu, who's also over there and then back to Nick.

Thanks, Catriona. It's been quite a busy period here in New York. We did 9 conferences over the past 3 weeks. And I was focused really on the small industrial space. As Catriona alluded to earlier, the housing, the manufacturing, the PMI turnover has been quite slow. But then on the other side, you've had the AI winners, and that's CapEx. And then you've had the defense wins, which is the geopolitical reasons. So within the portfolio, with it is a Bank Quanta, which is really exposed to the transmission and power lines and connecting data centers, connecting your solar panels connecting wind and exposed to sort of the ESG part of the market and the green energy. And then you've also got the defense. So South Frans a French company, and they've been exposed and they're in Europe. But then on the loser side, and this is why I was interested to go to this conference was to catch up with these companies that really haven't been going that well at the moment and see if there's any ideas. And to be honest, I was really surprised. Like a lot of these companies were doing a lot better than I expected with PMIs under 50 for nearly 3 years with housing turnover at 4 million houses. For reference, during COVID, that was closer to 6 million houses turning over a year and maybe a more normal market, it's around 5 million houses and it's been trading at 4 million houses. So a lot of those housing-related and manufacturing leading companies haven't been doing particularly well. However, when you actually chat to the management teams, they seem to really be in control of their business. And I think that's actually kind of a flow-on effect from what we saw in COVID, where supply chains were disrupted, you had capacity issues, you had price which was out of control. These managers are a lot more well equipped to manage the business through the cycle. And so there's an interesting environment right now where supply chains are actually looking pretty good. They're in control and understand where their costs are. They then got the capacity piece. A lot of them are running under capacity. So probably, I would say, on average between 60% and 70%. But to me, that tells me the underearning. And for these manufacturing and industrial businesses, there's a heavy fixed cost base. So as you start to see demand increase, they get to leverage their fixed cost base. And the last point on that was what they spoke about, which was really that if they do see demand increase, they're not going to bring suppliers straightaway. They will increase prices. And to me, that's actually a pretty good set up. You've got a business a management team that's in control of what their supply chain there and in control of their business and you've got potentially a rising price environment. However, what's going to lead to demand. And that's a million dollar question, where are we going to see demand increase? It's hard. We're not really sure yet, and that's why we're not completely positioned with our exposure across these companies. We've been looking at quite a few different ideas. However, last week, with rates being cut, rates being cut when you're seeing the economy growing and GDP being positive is actually a really good environment for small caps because it means you're probably likely to see free cash flow growth. And for small caps, especially industrial small caps, free cash flow growth is the best thing you can see. That's really going to help with both valuations and with earnings, and that's a really good setup. So we're doing a lot of work. And hopefully, in the next presentation, I can come and give you a whole lot of ideas of the stocks that we've been adding to the portfolio. But for now, I'll pass over to Will to talk about Europe.

Thanks, Will. So I just came back from a 2 chip in Europe meeting 50 companies across France, United Kingdom, Denmark and Sweden. And so it's been a great share, a lot of valuable insights meeting with management teams of companies that we both own and prospectively could own in the future. I'll characterize the overall macroeconomic environment as flattish. These businesses have been resilient and operating through some tough times. But at the same time, they just need a little bit of help on the cycle to really drive earnings growth and for that to be an accelerator. And we think that will come in time. Interest rate cards, potential certainty on tariffs, so there is a bit more clarity in the decision making a positive catalyst to come for that region. When I look -- it is a little bit nuanced by geography as well. If you look at France, there's a high degree of political uncertainty there with the leadership. If you look at the debt to GDP ratios, they're a little bit more constrained. Whereas in Germany, you've seen an announcement of fiscal stimulus in that region. And that could be really positive, but there's a little bit of cautiousness in terms of how that filters through to the rest of the economy outside of the defense spend. So we're paying attention closer to European markets, and despite the cautious tone, we're still seeing some really interesting opportunities. And today, I'd like to highlight 2 of the names that we own in the WG portfolio, the first one being All Funds Group, which is listed in Amsterdam and the second one in JTC, which is listed in the U.K. So starting with All Funds Group. It's the leading wealth technology platform in Europe. It has around EUR 1.5 trillion in assets under advice on its platform. And what it essentially does is it connects the fund houses with wealth managers. And there's a secular trend of moving towards an open architecture because of regulatory burdens because of greater demand and choice for the investor base and also technological capabilities, which adds data and analytics capabilities. So I met at the CFO of Allfunds, Alvaro, last week. We had a great discussion in terms of the business, what the longer-term strategy is and to developments that we've seen. Where is extremely convicted in Allfunds Group, we think there's amazing earnings growth opportunity for them. I think if you look at the business, firstly, there's a shift towards open architecture that we've talked about. This is exacerbated with the risk on mentality and flow of capital into Europe, which are positive catalysts for the business. Secondly, you've got the alternative platforms business, which we think it's under being underappreciated by the market. So they're connecting private market players with their wealth advisers, and that's still underpenetrated overall. Finally, valuation is simply to check for this business. It trades on 1.5x. It should do high single-digit revenue growth, it has 65% adjusted EBITDA margins and has a net cash balance sheet. So very attractive financial enteric with the pathway of positive earnings catalysts going forward. The thing that we're quite excited about is the Capital Markets Day early next year where we'll see the new CEO, Annabel Spring, talk about her role moving to the CEO. She has the pedigree in the background to really drive that business. and we expect to see some strong communication on where that business could go and help educate the investor community, which will be a positive catalyst. Second name I'd like to talk about is JTC. JTC is fund administration services for private and institutional clients. So they help client services for bonds, corporates and private client services. and they're really strong player in that space, probably one of the highest quality names. We have been attracted to date for several reasons. Firstly, JTC benefits from secular tailwinds, including increased regulation and complexity of the nature of the work they do and the rising propensity to outsource this work to players such as JTC to do the administrative and fiduciary duties. Secondly, JTC has a high degree of recurring revenue, so there's a really good line of sight to their earnings visibility. They have been deeply integrated to their clients. They have long-term recurring client relationships and multiyear contracts. And this is evidence to the high retention rate, and it shows the stickiness of the services. Finally, the industry a significant M&A opportunity. It's a highly fragmented market, and JTC is poised to consolidate that. Management stock has done very well executing on this strategy and consolidating smaller local players onto its platform, scaling it, driving the synergies and delivering compound earnings growth on the back of that. So we think it's a really attractive asset underappreciated by the market, and this is validated recently with JTC coming out confirming that they had preliminary takeover proposals from 2 giant private equity players Premier Advisers and [indiscernible]. Great to see validation that the business is being underappreciated by the market and see our investment basis play out. To give you a sense of the magnitude, JTC was trading on 12x EV EBITDA, comparable transactions in the space were high-quality peers were happening at 20x EV to EBITDA. So it was clear that there's the smaller to mid-cap part of the market is being overlooked by a lot of players, and we're starting to see capital markets activity pick up, and that's serving as a positive catalyst. We think this will help with the realization of the value for small and mid cap layers, and that really positioned the portfolio well going forward. And with that, I'll pass to Nick to share his insights from Asia.

Great. Thank you, Will. So as Will mentioned, I did take meetings with companies in the Americas and Europe this quarter. But I placed a particular focus on Asia, with meetings with companies from China, Singapore, Japan and Korea. And I'd love to give you a few takeaways from those conversations. So if we start with the biggest market of China in the region, this was a similar update, I think, from what you've heard from Catriona and the rest of the team will in Europe in that the economic backdrop is more mixed than outright positive. However, there was also a lot of optimism around artificial intelligence. Now coming into these meetings, it is worth remembering that from 2000 to 2019, China was just the most important thing for global growth. It accounted for over 30% of growth over that period. So if we did see an increase in growth from China, it would be really impactful globally. However, my conclusion was that we can't actually say that we are going to see that step up in growth from the meetings they held. There are challenges in the property market. The consumer is cautious and the business spending is also restrained. And so all eyes have been on stimulus and central government support and actually, a few companies told me that this was decreasing year-on-year. So from an economic perspective, not bad, but not our high conviction growth will increase going forward. Now this has a clear spill-on effect. And I'm hearing about this from other companies that there is excess capacity in China. A lot of these Chinese businesses told me the most attractive opportunities for them were international markets. So this can be a really useful insight because if we're thinking about an investment in the U.S., European or outside China company, just being aware that there are these highly motivated, very impressive competitors can be quite useful just in making sure we're accounting for that risk. If we pivot over to AI, so the one takeaway I think that happens across all of my meetings with Chinese companies was just the incredible level of entrepreneurialism, drive and excitement that they have, and nowhere is this probably more in evidence than artificial intelligence and technology. A great example of that is, even though they don't have access to the latest NVIDIA chips, they are innovating around this constraint as we saw with DeepSeek earlier in the year, which was a very strong performance at over 90% cost reductions, and that's continued with the likes of the Kimi and the Qwen models more recently. Now Qwen is a model from Alibaba, and we do actually hold Alibaba in the funds. Conversations with industry leaders across search, autonomous vehicles, consumer-facing content, really formed that Alibaba is a well-positioned company within this ecosystem. They have the #1 cloud offering, the #1 AI cloud offering and the leading Chinese model at the moment with the Qwen 3 offering. So we just think Alibaba is well positioned. But really the conclusion to these meetings was we do need to keep in mind the Chinese AI ecosystem. A lot of the headlines are dominated by the lots of OpenAI and NVIDIA, but there is a ton of entrepreneurial innovation occurring here as well. If I turn to Japan and Korea. Now these countries both have something in common, which is that they are facing demographic headwinds. The bill are living longer, the birthrate is insufficient to -- it is below the replacement rate. And there aren't immigration policies in place to offset this phenomena. So the upshot is the workforce is expected to reduce. An example is for every 10 people who retire, only 7 people join the workforce. Now I had many meetings across different companies, different industries, but barely 1 occurred where this difficulty in hiring didn't come up as a meaningful conversation. This will be bad for some companies. I held a meeting with a leading baby products provider based out of Japan. And frankly, the headwinds are just too much for us to be interested in that name, but it will be a huge tailwind for other businesses. So specifically companies that can automate away workloads likely through the use of AI, are just positioned to enjoy a multiyear tailwind coming out of Japan. So a couple of examples. One we already hold in the fund is actually SAP, which Catriona mentioned. Now this often occurs, even though it's a German-listed technology business, they enjoy the position of having the leading expense management software for enterprise in Japan with the [ Concur ] offering. And this is just a great product that's going to see clear AI innovation and reduce the workloads across corporates in the country, and it will stand to benefit SAP over time. From a Japan listed front, similar to other parts of the world, we are thinking that the back office business services suite is actually ripe for AI innovation. We had a number of meetings with companies we think are going to be winners from this tailwind, and we're in the process of building out those positions. So I look forward to updating you on those in the future. So just closing out, as with Ultra really useful to get in front of management to see how they talk to them about how they're seeing the world, it turned out some new ideas and then was a very useful trip and set of meetings to take. So with that, I'll pass back to Catriona.

Great. Thank you, Nick and Will and [ Tom ]. Appreciate all the insights. As you can see, we've all seen lots of companies, and we're finding lots of new ideas One thing I did want to point out in terms of thinking about the market more generally, it has been very interesting in terms of what's driving returns of late. It is a very narrow market that we've seen since the end of June, you had 60% of MSCI World returns driven by 10 stocks, and that number has kicked up to 75% of returns in September, have been driven by 10 stocks. So I mean, our view on that is we are finding lots and lots of opportunities outside of that group. And we think that we will get a broadening of returns and that there are certain pockets of frothiness in the market. And so we did just want to leave the slide in terms of how we think about our process. We will continue in any market to remain extremely disciplined in terms of our applying our investment process. We look for undervalued growth companies from around the world. and as I said, are excited about the portfolio of companies we own and the new opportunities that we are seeing, but it is with that overlay of always sticking to our investment process. With that, why don't I hand over to Olivia to facilitate the Q&A section. And we have got -- I will say we have got a new system. So hopefully, this all works very smoothly. But yes, I appreciate any feedback on it at the end.

Thanks, Catriona, and thanks for everybody for sending in your questions. We'll start with first one from [ Annabel ]. Can you give us your key takeaways on the recent U.S. reporting season?

Yes, sure. Why don't I kick off and then anyone else can jump in. So in terms of repo, it was a very interesting reporting season. We did have a situation where Liberation Day and the announcement of tariffs came at the end of previous quarter where half the companies had guided ahead of Liberation Day and half guided after. And so you had some where they were factoring in tariffs, some where they weren't. And so it was a really interesting setup going into reporting season where some had through the quarter then gone to conferences and kind of given indications of where they thought tariffs, but others just didn't even update. So it was a very volatile reporting season. And generally, again, there was a lot of focus on that AI tax spend particularly from big tech. The retailer -- in retailer land, it was very mixed with then trying to guess what the impact would be or just pumped down the road in terms of saying, we'll come back to you with guidance once we know where tariffs land. So it was very much dependent on your sector in terms of how you fared but I would say the volatility through reporting season was very high. And you were seeing moves that might have been a 5% normal, was a 20% like up or down. Yes, any other inserts?

No, I think that's spot on. And I think I guess we took the meetings relatively close to the end of the reporting season. So the themes you heard us talk about across U.S., Europe and Asia, are broadly reflective of the themes we saw in the reporting season. But absolutely, it was an interesting setup with some volatile price reactions.

Thanks very much. We'll go to the next question. We'll stick with you, Nick. This one is from Greg. He says you can see we've sold out of Novo Nordisk. Have we bought into Eli Lilly?

Yes, great question, Greg. Thank you. We actually continue to hold very -- well, a relatively small position in Novo Nordisk. Our view on that space is that the GLP-1s are actually one of the most attractive parts of the pharmaceutical connects to be invested in. There is clearly just a huge amount of growth that's going to go into that space over the next 5 years just as adoption increases. However, we also hold the view that, often, you'll see pharmaceutical firms straight at relatively modest valuations. That's probably appropriate. So actually, I would say our current view on the situation is Novo Nordisk is actually trading at a very attractive valuation today. they've just had some recent good data around their [ Wigobi ] oral pill. So probably between the 2, it's Eli Lilly that looks more expensive, more filled with optimism likely to be a winner as well, but I think it would probably be more mortise that's attractive today. But again, this is a relatively small position, and it's just to make sure we have some exposure to GLP-1s.

And we only bought the position after the share price it was just because it is already being hit. So it's a more yes. recent position. And as Nick said, tiny, but we've got to figure out, yes, we want to see that the catalyst that we're sort of buying into play out before we would even increase it.

Thanks, both. And we'll go to Will Liu in New York for this next one. It's from George. What do you think of emerging markets, given that they've underperformed developed markets? Are we invested in any emerging market companies? And then maybe, Nick, if you could touch on any Indian companies that we might be looking at?

Sure. That's a great question. I think we think about emerging markets in 2 ways. There's direct exposure and indirect exposure. Because we own global companies, they have very diversified revenue streams and we have companies such as TransUnion, which might drive revenue from India, as an example, which I'm sure Nick will touch on the second part of this question. In terms of direct exposure, one which we quite like and Nick highlighted earlier is Alibaba. They obviously, they have a really strong position in China with its e-commerce and cloud computing business. But they also have Lazada, which is a really strong presence in e-commerce in Southeast Asia. Their cloud business is actually very strong in Southeast Asia as well. So in Southeast Asia, they're not just using the Googles, Amazons markets of the world, Alibaba is a viable option in, say, Thailand, Indonesia, those type of emerging markets. And Alibaba has a really strong presence there. And then finally, they strategically invest and partner with different assets. So Tokopedia in Indonesia is a really great e-commerce business that they've partnered with, and they have different bets across emerging markets. So Bob is 1 of the direct exposures and maybe I'll pass to Nick to speak a little bit about TransUnion and the Indian exposure.

Yes, absolutely. Thanks, Will. So I think interestingly, we mentioned SAP prior. That was a company that, although it's based in Germany, actually is fairly well positioned to benefit from part of the Japan AI thematic. You'll often have that time and time again where a U.S.-listed company or a European-listed company will actually have great exposure in a different part of the world. TransUnion, which Catriona mentioned, it's a leading credit bureau in the U.S. It's really well positioned for the mortgage recovery in the U.S., but they actually hold the leading credit bureau in India. And although the U.S. market is kind of a 3-player setup between themselves, Equifax and Experian, their civil offering in India is just really strong. It's well north of 50% market share. It's just a great exposure to have to India. Through time, that's been growing really fantastic rates, north of 20%. And actually, we think it's a fantastic dynamic to play because as India increases their wealth and their income per person, it's a natural effect to where credit markets will broaden out and you'll get more credit provisioning. And so TransUnion's exposure actually is very attractive in terms of India. Now broadly, in terms of investing directly into Indian companies, we have found the dynamic through the years where you will find great businesses. You will find great growth within those businesses. But often, the valuations have been somewhat of a limitation. So if you take a TransUnion, which is trading on about a 20x forward multiple, with a great exposure to India. That feels like a really clever way to gain exposure to the Indian market. Catriona mentioned it, we will just maintain valuation discipline as part of our process.

Absolutely. And the only thing I'd add is like having invested in India historically, I mean, you do -- right now, it is really interesting time because historically, you've had a lot of businesses like IT services listed on the Indian Stock Exchange, and they are front and center for AI disruption. So you just you've had a dynamic where there's been a lot of expensive stocks but could be great franchises like Hindustan, Unilever, for example, has always been a great business, but super expensive. You've had a ton of IT services, which are front and center for AI disruption. So yes, our exposures in India are through, as Nick said, in terms of, and as Will talked about in terms of more we love the idea of owning TransUnion and it being a play on credit growth and a credit bureau play, but without directly investing through the Indian stocks.

Thanks, Catriona. And this next one is for you, stick with you Catriona from Brodrick. Given the U.S. administration's desire to lower the U.S. dollar and the dominance of U.S. equities in the portfolio, how do you manage that currency exposure?

Yes. So the portfolio is unhedged when we started the fund part of the offering with WAM Global was that our shareholders were very much invested in Australian stocks listed in Australia exposed to Aussie dollars. So in owning WAM Global, you are getting exposure to both offshore currencies as well as offshore listed entities. So in terms of the U.S. dollar -- U.S. listed companies that you are getting U.S. dollar exposure. A lot of them, as we just talked about, though, are very multinational in nature. So when they translate back their earnings, it's not just U.S. dollar exposure that you're getting. It is multinational, multicurrency in nature. The other point is that we are underweight the U.S. relative to the index. We are overweight Europe. And so as the U.S. dollar potentially goes down relative to the index, we are less exposed.

And we'll go back to New York to Will Liu for this next question from George. He says you had a positive write-up on Tradeweb in the August investment update. The share price has now fallen in a further 9% in September. Could you provide further information about the transitory headwinds that were mentioned in that report? And could you discuss the view that we have now in the company? So over to you, Will.

Yes, that's a great question, George. So we still hold Tradeweb in the portfolio. It's one of our top 20 positions. We have traded around it a little bit. So we took some profits at $150. And at the price it is today, we're evaluating whether -- it's an attractive addition in terms of adding to our weighting there. So the thesis for Tradeweb is they're going to be a beneficiary of the electronification of fixed income markets, particularly rates and credit, and that largely is still the case. So when we talk about transitory headwinds, a lot of these exchanges do particularly well on volatility. As we know, volatility has been fairly muted over the last couple of months. The other key KPI for all of these exchanges is they release monthly data. And so largely, Tradeweb was in a really sweet spot where monthly to monthly data was accelerating. You saw some volatility debate on interest rates, credit spreads widening. And that is a really ideal environment for Tradeweb. Currently, what you're seeing is credit spares narrow a little bit volatility subside and then market share gains that they've historically taken from other plays in the industry has slowed a little bit. But at the same time, they're still -- if you look at their August numbers, they're growing average daily volume 11% a year. So while the surprise factor to the upside hasn't been as significant compared to the last year where trade was an awesome performer for us in the fund. We still think they're in a great position to win from the electronification of bond markets. And we expect some of that monthly data to improve over the coming months. And we think now is a really interesting opportunity and we're considering internally whether we should be adding to our position because the thesis is still intact. There is some transitory headwinds. We just need to be confident on the catalyst and the path forward from here. So still positive on trade work. And as I said, it's a position we own in the fund.

Thanks, Will. And Catriona, we'll go back to you for this next one from George. Are you more optimistic on European or U.S. companies going forward?

Good question, George. So for us, it is very much bottom like bottoms up. So it doesn't necessarily matter if it's a European or U.S. company. It is about what we fundamentally think is, is it undervalued? Do we think the growth story is exciting? Do we think they are a catalyst to drive the share price? So we are overweight Europe compared to the U.S., but that's just because of the ideas that we've been able to find in Europe and actually the U.K. I mean the U.K. has been a fascinating market where it's just been like anything that is quality just keeps getting taken over. And whether it was -- we've had numerous takeovers in -- on the U.K. market. We had -- over the years, we've had [ BIFA ], which was a waste management company. We had Entertainment One, which was in the media space, we had Alpha Wave, which was in the chips and actually an AI beneficiary and a Broadcom comp and so -- and then JTC in the last couple of months. So it's a really interesting market where it's looked incredibly cheap. And so we found lots of ideas, but they keep getting taken out because the valuation discounts in the U.K. relative to the U.S. have been so pronounced. So it's not necessarily a preference for the U.S. versus Europe. It's just where we find those individual ideas. As we've all talked about in this webinar, we do see opportunities everywhere. But it's -- you know the backdrop in terms of whether it's been that the U.S. growth has been stronger than Europe, but you can always find interesting ideas whichever the geography.

Thanks, Catriona. And Nick, we'll go to you for this next one. Do you have any views on Uber?

Yes, absolutely. So we do hold a view on Uber. I think it is a fantastic business. It has network effects, clearly, if you are ordering either food or a ride, how much -- how many drivers, how quickly you can get it to yourself is absolutely a critical part of the business. And so you've seen what you would expect to see, which is over time, everybody has outperformed lift in the U.S. Interestingly, they gave up on some markets. They were that strong in. I met with Grab in -- on my trip, who are based out of Singapore. Uber did a deal with them to give up the Southeast Asian markets to stop the price wars and to consolidate on markets, they were really strong, which frankly was strategically extremely clever. So we're favorable on Uber as a business. I think the valuation is clearly a limitation today because it's had a significant run. And then whenever you're paying a very high valuation for a business, you always have to keep at least half your minds towards potential risks and potential disruption. Now there's a good chance they can navigate this, but the rise of Waymo in the U.S., Baidu in China clearly, autonomous vehicles are stepping into that next stage of development. We love that we hold Waymo through Google. Waymo's just a fantastically positioned company. But what they've done is really clever. So they've used Uber for one market, Lyft for a different market. They've used their for San Francisco. So they're clearly just trying to arbitrage away that consumer app layer. Now again, I think Uber may find ways to address this, but when the valuations really stretched, you may be not getting paid off for that risk. So I think it would be more one we would potentially take an investment in at lower valuation levels.

Thanks, Nick. And we'll go to New York for this next question. It's from Ian. He says he's read that some U.S. -- some Chinese companies listed in the U.S. don't comply with reporting standards. Is that your understanding? And if so, how does that impact stocks like Alibaba?

Yes. It's a good question, Ian. And that was -- has been a topic of debate over the last probably 10 years, but in recent history, it hasn't been as much upward debate. So firstly, Alibaba reports according to U.S. reporting standards, so they're in compliance. The base historically was the public company accounting oversight board would want to inspect the auditors of these Chinese companies and they weren't given permission to by the Chinese government to do these inspections and conduct these audits of the auditing company. That's since been resolved as of 2022. I think there's a bill pass called holding foreign companies accountable. And so the latest there is that the companies are in compliance with U.S. regulations reporting standards because you are correct in a few years ago, there was commentary around potential delisting of Chinese companies because they want to take compliance, but that's been since been resolved. So they're in compliance with [indiscernible]. Alibaba is the only Chinese name we own. That's listed in the U.S. So we feel relatively comfortable there. And obviously, when we do encounter these issues with corporate governance, we take a close eye on making sure we dig into the financial statements, Channel Tech that they're reporting is up to scratch and make sure we risk weighted it proportionately as well. So thanks for the question, Ian.

Thanks, Will. And we'll go back to Catriona for this next question from George. He's asked during your last webinar, you said that you were positive on ResMed. Is that still the case given the share price appreciation since then?

Yes. Thanks, George, for the question. That's correct. We still do own ResMed. We bought into ResMed, it's a stock I've known for many, many years on all the GLP-1 fees. So the stock, it was going to be the end of sleep apnea with GLP-1 solving obesity. And whilst we think the GLP-1 space is super interesting and got huge growth potential. We also took a view that, that would not be the end of ResMed. And pleasingly, since then, they've actually continued -- they've actually sized up the opportunity that they think will be driven by GLP-1. So -- and how potentially they actually may benefit from the GLP-1. We think they -- these GLP-1s certainly reduce weight. But when you look at the statistics for obesity in the U.S., often they're bringing people within -- into a category that actually makes them an addressable market for me -- so I mean, ResMed's also benefited from their key competitor, Philips being out of the market. So they've had a double benefit there from the rhetoric around GLP-1s fading and then they also -- that they've had a competitor out of market. So we still do like it. The share price has had a good run. So yes, in terms of weighting, that's something for us to think about or we still do like the stock.

Thanks, Catriona. And we'll go to Nick for this next one. It's from Dave. He says a growing number of respective commentators have stated that we may be living through the greatest bubble the world's ever seen. If we see a crash or correction, do you think that we will live in the carnage for years? Or will it be business as usual the day after? But he says there are 7 days left in September and people are getting scared and a lot of us are masking dry powder.

Great. Thank you, Dave, for the question. That's certainly a thought provoking and kind of a conversation starting question. I think if I had to kind of take a step back and summarize how we're seeing the markets today, it would be in line with what Catriona mentioned during the prepared remarks, just around -- look, there are some signs of froth appearing in various parts of the market. We keep a close eye on credit spreads, and those are at relatively [ gnarly ] levels. We are reading a lot of money is going into private credit. Now obviously, we're in equity funds, so we're not investing in that. So I think, look, there are certainly things to keep in mind. There are reasons to be risk aware at this point in time. However, at the same time, we're seeing interest rates are falling, which would support valuations. We're seeing this effect, Catriona mentioned that, although the market at a headline level may look expensive. It's actually really a tale of 2 markets, and you are getting significant opportunities because the market itself is so narrow, there are a lot of investments that are very interesting at this point in time. And then the last thought is like with regards to artificial intelligence, which is a huge part of the strength of the market at the moment. We do take the view that this technology is real. This is genuine technological breakthroughs that will absolutely increase productivity, you only have to meet with so many CFOs, CEOs talk to company management teams to realize they are very excited about this as well. So again, signs of froth are occurring, but I would say it's probably more bounded optimism at the moment. But I think part of our job is to be very aware. So certainly, we're keeping a close eye on some of these risks that are do exist in the market.

Thanks, Nick. We'll go back to New York for this next one. It's from [ Sandip ]. He says, can you please give us your outlook on the market. We'll let both of you take that one.

Sure. I think as Nick and we've sort of talked about this a little bit, it is very narrow at the moment. And we really do expect that to broaden out, and that's how we're positioned because we think that the impact of AI and also the impact of rate cuts will flow through to the broader-based economy. The stock market is huge in America. I feel like every time I go anywhere you over here, someone talking about it. And I feel like in the past, you've always heard about were a taxi driver that you get in starts talking about the market, that's a word of caution. But when you're living here and you see it, like everyone is so exposed in their retirement funds, everyone is living and breathing it. And I think that's been part of COVID. And the actual wealth effect from the stock market will mean that that's broadening out and everyone feeling a little bit more confident. And then you've got rate cuts as well, which should, in time, potentially help the housing market. And so consumer wealth and the consumer financial pressures through inflation will come off and it will help broaden out the market rally because you'll start to see sort of the stocks, like I alluded to earlier, like the industrials, the consumer, the retail and model around the corner, but it will be at some stage in the future where it will broaden out. And there's sort of 10 stocks impacting the index will broaden out to the other within the S&P 490.

I think we're reasonably optimistic. I think of the companies we own, they satisfied undervalued growth criteria. I think if you look at the performance in the infrastructure layer names exposed to AI. They're benefiting from a demand-supply imbalance. There's this huge arms race to build out capacity within the data center to connect it to energy, to connected to electricity. But at some point, that demand supply will balance and that we're thinking about what happens next because you will have built the compute power, what are the AI applications are going to be run on top of those data centers, the GPUs, where they're going to be applied, where the productivity benefit is going to come from, which other ready companies to make the most new products and synergies from leveraging those capabilities. And that's what's really exciting. And so while this infrastructure spend is great and the share amount of money by the hyperscalers go into this build-out has meant the stock market has been so narrow. We think with rate cuts with certain clarity on to tariffs and where they ultimately will sit -- will mean that management teams will be in a position where they're ready to make decisions a little bit of volumes for these businesses will mean significant operating leverage. And our job is really to find those exciting opportunities because where we're at there, making them in person trying to find what's happening on the ground. And we think there's some really exciting opportunities, which we talked about on this call.

Thanks, guys. And we'll go back to Catriona for this next one. It's from David. Can you talk a little bit more about how you reduced the discount to NTA given that some domestic lakes have widened?

Yes, sure. So for us at Wealth Asset Management, we think the key to closing discounts is really about 3 things: it's performance. its dividends and then it's shareholder engagement. And I think with WAM Global, we've had a concerted effort on Al. Pleasingly, the performance has been good of the fund. We've had a really steadily increasing dividend, and we have announced that special div. So that was super helpful, I think, in terms of providing that growing -- that stable dividends and growing stream of fully franked dividends. And we have been out of fully franked, which is terrific. And then that third piece is shareholder engagement. And that's been a huge effort across the entire business in terms of WAM global, but then we do roll that across all the funds. So -- and we will continue to do that because as I said in the prepared remarks, shareholder engagement is absolutely core to what we do. And I think -- that's what really differentiates Wilson Asset Management as a business. So for us, I think in terms of closing the discount for WGB it has been those 3 elements, the performance the dividends and the ability to add in that special as well was helpful. And then thirdly, that shareholder engagement piece. And whether it's the webinar regular webinars, ASX Investor Days, the core campaigns that have been run underway from the entire business. The road shows, yes, there's been a huge effort in terms of shareholder engagement alongside the performance and the dividends.

And I guess, like absolutely, and just to add some thoughts. So we've built out the Investor Relations team with April and Tommy. My team, the distribution team has done a great job. And I guess as a company, it is just great to run one of those campaigns to see results with regards to the discount. And then to know then you can go to do that to across the business. So I think that's -- yes, it's really positive and exciting.

Thanks, Nick, and we'll stick with you for this next one. It's from Ian. He's asked is Alphabet the only one of the magnificent 7 names that we own or are there any others?

Yes. Great. Thanks, Ian. So I think if we take a step back and we think about the investments we're interested in, we have at times discussed the fact that the Magnificent 7 is expensive, and there's opportunities in the small and mid-cap end of the market. I think that's absolutely true, and that's absolutely still a correct statement today. If we think of the investment in Google as illustrative, just because Google was part of the Magnificent 7 didn't mean it didn't trade on a valuation that was frankly just far too cheap for the value and the quality and the growth that it offered. So I think the answer would certainly be we'll take a flexible approach. We also hold Amazon in the fund. This is a relatively recent investment actually through the Liberation Day. Amazon, which we know and have known a few years, it's a wonderful company, a great retailer leading cloud provider in the U.S. and Europe. Now the through Liberation Day, they actually put a lot of conservatism in their numbers around how much tariffs would impact them and we saw that as actually an opportunity to take an investment because they are just such wonderful operators. We took the view that they would actually be able to negotiate discounts here or shift the products they're selling or effectively find a way to work around tariffs. It's a company that frankly is just trading similar to Google at a valuation that didn't reflect the intrinsic advantages. So it is another holding in the fund. I think going forward, like we will just continue to apply that process, whether the company is within the Magnificent 7 within the small mid-cap side of the market or just anywhere within the market. So yes, thanks for the question.

Thanks, Nick. And we'll go back to New York for this next one. It's from Denton. He's asked which industry sectors do you think will benefit the most from AI? For example, financials, insurance, electricity, utilities, data centers, et cetera.

I think we can try and answer that question. I think with artificial intelligence right now, the flow of money, as I mentioned earlier, is going to chips and energy, which is the 2 biggest constraints of building a data center and building out this compute power. I think over the slightly longer time horizon, the way we think about it is we think companies with a data advantage as a massive competitive advantage. So when I think of application software such as SAP or Intuit, where they're most entrusted by their customers, the customers' most valuable data is sitting on their platforms, and they're going to be able to leverage OpenAI and its capabilities with the large language models to build the right products and services. And in fact, they're already getting ready to do that, like their technology stacks are in a position to integrate with these large language models. They're testing productivity products. They're using it themselves internally. And we think that's a really interesting way to approach where the future winners could be. Will, I know you've spoken to a huge number of companies as well.

Yes, I think like -- I mentioned this on the last call, the CFOs seem to be the ones that are really bullish at the moment because they can go into their business and take out cost or increased productivity. I went to an AI breakfast a couple of weeks ago, and then I went straight to a meeting with -- it was like a health care insurance company. And I sort of said, wait this breakfast was really interesting and learn a few bits and pieces. And this guy said, he said, our business is full cost. We've got so many people trying to help with insurance and connecting from one insurer to the other insurer and you've got the customer calling in, trying to talk to the right person. He said that is ripe, like that has to be disrupted by AI. And there's so many opportunities. And this is a CEO saying this to me, there's 2 parts, and this aligns with our thoughts. There's the customer experience piece, which can help convert revenue and drive revenue growth. And then there's a productivity piece, which can help lower costs. So -- and that talks to increasing margins. So there's going to be lots and lots of winners and is trying to delineate between who and who is going to be the biggest winner because there's this other underlying theme where people are trying to reduce their vendors as well. They don't want to be exposed to 30 different companies that are trying to offer them an AI solution. A lot of the time, it's 1 company is doing the whole thing is looking after at all. There's been [ Pega Systems ] is a company that we've met with and own a few shares in and that's one of them which is owing thermistor has actually come back and then he can come back with our AR transition as well, especially on the customer front and improving that customer journey.

Yes. So it's interesting. I'd be across another question we had a number of industries as examples. I think it'd be across the broad industries because there's productivity gains to be had across every business. We are leveraging AI to its maximum capability. I think the interesting opportunity will be the ones that are innovative and find new revenue generation opportunities and really use this opportunity to build new products, build new services, create new lines of revenue. And those will be the game changers going forward, and that's what we're looking out for as well.

Thanks, guys. And we'll go to Catriona for this next question. It's from [ Mark ]. Can you please talk about why the NTA fell in the month of August?

Yes, sure. So the NTA was down a little bit. And that was just underlying stocks. It was, as we talked about earlier, super narrow market, even within our tech holdings, we saw it was really only the hardware layer that we're running. We have a strong view around at the application layer will be the next leg in terms of AI beneficiaries. So I have lots of exposures there. and lots of them just lagged in August. And a great example would be Intuit, which I talked about earlier, which subsequent to the month has had their Capital Markets Day laid out 20% top line growth out to and was just a laggard during the month of August. So we used that as an opportunity to add more. And so yes, it was really just the individual names that we're working in a very narrow market. Yes, they played into creating more opportunities than actually driving the NTA in the month of August.

Thanks, Catriona. And we'll go back to New York for this next question, again for Mark. He says that usually the market in the U.S. and Australia comes down in the month of September, but that has not happened yet so far. Do you think that the market can still fall in September and October? So over to you guys.

It definitely can. I think the hard thing with seasonality data is it's often a quite a pick point. So I think this is timber. I was looking at it the other day, there's a few outliers in there, like September last year was down. September '08 was down, and it was down significantly due to GFC craft. So when you look at all these reporters come and say, December is a tough month, it's there are -- I think there are 3 instances over the past 20 years where September was down a lot, and that actually brought the average down, which makes it look like September's an average month. But in general, September is actually an okay month and usually isn't that bad. So we don't have a view on September, and we don't have a view on October either. We don't look into the seasonalities and the presidential cycles and the rest of it. We try and find companies. And look, if there is a pullback, that would be great because there's lots of opportunities lots of stocks we want to buy better to buy them when they're cheaper than when they're more expensive.

Yes. And then from a positioning standpoint, we've seen companies guide pretty conservatively just because there's been a lot of turbulence from geopolitics, tariff uncertainty. And so companies are taking quite a prudent approach to guiding future earnings growth. And then obviously, we've had a rate cut in the U.S. as well. So they position in plays an important factor where earlier this year, Liberation Day, management teams are highly uncertain. They took a pretty prudent approach to next quarter's and full year's guidance. And I think that's kept the pace with many companies sort of keeping a degree of marginal safety in their full year guidance. So we still think long term like share prices will soon earnings growth, and we still think the earnings trajectory is pretty attractive across the different markets that we see.

Thanks, guys. And Catriona, we'll go back to you. This next question is from Rob. Are travel fees paid by Wilson Asset Management or by WAM Global?

They're paid by Wilson Asset Management. So you pay management fees at 1.25% for WGB and that, in turn, is used to fund travel. So there's not additional costs on top of the management fees that are funding travel for the team.

Thanks, Catriona. And sticking with you. This next one is from Peter. He asked, are you now based in Australia? And can you also touch on succession planning?

Sure. So yes, I move back at the end of January to Australia after 4 years in New York and Will Thompson and -- so Will Liu joined me the year before and Will Thompson moved at the same time, switch with me. So the 2 Wills are based out of New York, and I'm back in Sydney with Nick. So we think that's terrific in terms of the ability to see companies on the ground still in the U.S., and we travel as well all the time as well, obviously. But yes, I'm based back in Sydney. In terms of succession more generally at WAM, I think it's been a really important focus for the business generally. I mean, for any position we want to have back up. We apply that -- it's a bit crude, but we apply the hit by the bus test in terms of anyone in the business, you want to have backup. And so whether it's Jeff, obviously, no one can replace Jeff as a person and he is an incredibly important -- integral to our business. But in terms of running the funds even for him, he's the portfolio manager on [ WAR ], but has Marty and Jesse running that alongside him. In terms of -- for me at WAM Global, I have Nick will Tomo in the team. So if anything was to happen to me, we imply -- it's the same process that we apply across all the funds in terms of the WAM investment process. So we have a very -- a process that any one -- not any one -- and then but that can be applied, and that's been in place for 27 years across the business. So yes, look, I think we find -- we think succession is super important for every position in the business. and try to have replacements for all of us. But yes, and really sticks to process in terms of investing the money across any of the funds. And while we almost might like to think we're not replaceable, the idea is to set the business up for the next 50 years rather than just for today.

Thanks, Catriona. And we'll go back to New York for this next one. What are your thoughts on cryptocurrency and Bitcoin? So over to Will.

Yes. I'll just at the Barclays Financials Conference. And there was a lot of talk on stable coin. You've got guys online like I think it's [ Christy Dee ] and [ Tommy Lee ] talking about $1 million price targets. So the cryptocurrency space is hot but it depends on your view. There's the fundamental and it's kind of like the infrastructure layer of how you can use cryptocurrencies in the blockchain, whether that's for payments, whether that's -- you see a lot of the times of political tension like I think the Argentinian Bitcoin price relative is going quite high at the moment because of what's happening there. You've also got the ability to use stable coins for payment. And so that's a really disruptive space, and it's a really interesting space. Bitcoin, a lot of people view it as a digital gold as a safe haven so it maybe be younger generation, but it's been underperforming gold recently, which has been obviously having a good little period. So it's a really interesting space. Within the portfolio, [ XYZ ] is one of the companies we own, which has been has always been one of the leaders in the blockchain in the crypto market. They've got their own actually data mining of Bitcoin mining rigs, which they're trying to provide to anyone who wants them at a really low cost. And there's probably no upside to that in the share price, and it's quite interesting what Jack or is trying to do there. And then some of the other exchanges, we're invested in actively looking at the opportunities for stable cut as well.

Yes. Well, mostly integrating blockchain technology and into their operations to see if they work better. But in terms of direct exposure, not a lot of crypto or Bitcoin, I don't think.

Thanks, guys. And Catriona, we'll go back to you for this next one. It is from Rob. He's asked, why are dividends declared so far in advance of the payment date? And what if there is a big market correction and franking credits are lost? He says a lot of potential increase in NTA is lost because of the high dividend policy. Can you please explain?

Yes. Thanks for the question, Rob. So there is always a balance in terms of how much is paid out in dividends and how much you get through the NTA appreciation. And I guess it's why we tend to across all the likes, try to very steadily either hold or grow the dividends over time. And you have seen that depending on the leak at WAM that some of the dividends are very high, I'd say, for example, for WAM Capital. With WGB we -- and that was one of the reasons why we did the special dividend for WGB rather than increasing the dividend by the $0.04 because you then have a committing because we don't want to -- the idea isn't that you then cut dividends. So we wanted to reward shareholders by because the investment portfolio performance has been strong, we have been able to drive the NTA up a lot, but we didn't want to hold the fund to having to pay out such a high ratio into perpetuity or potentially having to cut. So we do have a very strong profit reserve. The other factor with whatever dividends we pay, as you rightly point out, you want to have -- we tried to frank and have been able to frank the dividends at the 100% level since the start of WGB. And so unlike the profit reserve, which accumulates over time and is without having to actually realize and pay tax. The franking is only paid as we sell the shares. So frankly, accumulate at a slower rate as we pay tax, whereas the profit reserve is -- we can have very strong over $0.80 a share in profit reserve, but only $0.10 in franking. So it's -- and then every time we pay tax, we put more into the franking balance. So there isn't the risk once we've paid the tax that the franking is not there. So to your point, if the share price then falls, what we're trying to do is have paid enough tax that we have the next couple of dividends covered in terms of franking. So yes, we do try to be prudent in terms of managing that balance between having the franking and whatever the profit reserve is over time. But yes, the profit reserve will also -- will change with what happens with the share market in general. But we feel pretty good in terms of the visibility we have over both the franking and the dividends. To directly answer the point on why we pay, why we announced the div and then have quite a long lag between when it's actually paid. I mean, Jeff has always had a strong view that you want to be trading as long as possible. And he says you should ideally always be trading come dividend because the share price tends to trade better when it has come a dividend payment. And it's -- which is why even with WMX, the new monthly income, product, you will always know that a dividend is coming. So his view has always been, it is ideal to trade income dividend for as long as possible, and you tend to see that in terms of the discounts. And so it's an advantaged position to have a long lead time in terms of announcement of a dividend and when it's paid.

Thanks, Catriona. And we'll go to New York for this next question and then maybe bounce back to Nick and Catriona. George has asked, do you hold any European or U.S. banks that are comparatively undervalued to the Australian banks, for example, Lloyd's in the U.K. or Bank of America?

Thanks. Maybe I'll get started. Most banks in the world probably are comparably undervalued to Australian banks, given how expensive they are for the amount of growth that they achieved. So we don't in any banks, we historically stayed away from that sector just because sectors such as banks and resources, they're more beholden to the macroeconomic environment. So the shape of the yield curve, what's happening with consumer, bad debt, et cetera. The quite leveraged by nature. So historically, when we think about our financial exposure, we're looking for companies with durable moats. We've historically invested in exchanges or finds Intercontinental Exchange trade where they've had a really strong track record of compound earnings growth, and we think those are better businesses to own over the long term. So we've historically stayed away from banks. I'm not sure if you have anything to add.

Yes. There are so many banks in the U.S. market. I start the into a banking conference at Louisville, the Bank of California, the Bank of Colombia, the Bank of everyone like I tell these managing growth stories, but then you go and look at this like it's not as good as what they're telling you it is and then there's just so many like -- the banking sector is really hard and the risk that they have to take to continue driving returns. There's just so many better ideas outside of the banks we find especially within the financials with the exchanges that we own and other ideas that yes, we don't traditionally look at the sort of traditional banks.

We'll go back to Catriona for this next question. We have a question on cash from [ Ian and Mohan ]. Can you please discuss cash as a position in the portfolio and how much you hold for investing?

Yes. Great. Thank you, Mohan and Ian. In terms of the cash, we do tend to have the cash relatively low. So 10% from a kind of 1% to 5% level generally over time. just because we tend to even when we're getting more cautious on valuation to then change what the holdings, the individual underlying holdings are within portfolio and say the exchanges are a great hedge on volatility if we think the market's getting toppy or we'll rotate into lower valuation stocks if we think the market is frothy. So we have tended to try to stay relatively fully invested over time. The cash at the moment is about 2.5% so relatively low, but kind of in the band that we tend to run it at. And as I said, we have things like the exchanges, which are a relatively good hedge on volatility.

And we'll stick with you for this next one from Ben. What is the outlook on Hemnet? Are there any headwinds or a threat to the long-term investment basis?

Yes, sure. So Hemnet is the equivalent of REA in Sweden. And I mean Will just as you met the CFO last week in Sweden, you might want to add on. But it's a story that we think is really interesting in that it's, say, 15 years behind REA in terms of monetizing the opportunity they have. They have about 90% plus market share, but a monopoly kind of whereas in Australia, you've got REA and domain, there to sole basically the dominant player in Sweden and it's undermonetized. So that's why we like the stock. It's been a very good performer for WGB over time, but more recently, has been sold off and we think there's a number of things. It's always easy when share price is coming off to justify why it's coming off, but often with reasons that aren't the underlying cause of the sell-off and why it's come off more recently is fundamentally listing volumes are down in Sweden because of the underlying housing market. But people are compounding it to say it's more competitive threats that are causing the issues. And we think, look, we still like the long term for the business. Sure, there's some noise at the moment in terms of the stock, but we still believe in the long-term thesis and think there's a significant opportunity to monetize. And when you look at, say, REA, for example, it's just been an incredibly strong compounder earnings over a very, very long period. And we think that is still the opportunity that Hemnet has going forward.

And if -- well, if you want to add anything, by all means, feel free to afterwards. I think an extra to just from a competitive landscape is in the U.K., we saw Rightmove. There's a company called CoStar in America, who is attempting to attack them through on the market? Here in Australia, we have domain. Again, CoStars being quite an aggressive company. Now if history is any guide, the network effects of these businesses are just so strong that you can really attack very aggressively, really spend a lot on marketing, try to build the business. The examples from Rightmove, the examples potentially from REA in a few years, I know they tried to do it in the U.S. as well with Homes.com vs CLO. Once you're a 90% market share company in these industries, you just have such a wonderful competitive position. So to Catriona's point, when the market does get concerned on the competitive side of things, that's likely a misunderstanding of the strength of these businesses. Yes. Will, by all means, if you wanted to add anything, feel free.

Yes. So I met the CFO in the offices in Sweden, probably 2 weeks ago, and I had a really interesting discussion with the CFO. So I think some of these short-term concerns, like we walk through some of those with the management team and really got a sense of comfort. I think the biggest thing right now is it's easy to paint a narrative when the macroeconomic situation is weak. The Swedish property market, there's a disconnect between buyers and sellers right now. And so you're not seeing the volume of transactions that's happening in that market. At the same time, [ Buly ] operates higher up in the funnel, so they're getting a few eyeballs. But we think the position of Hemnet is strongly entrenched. And once volumes come back and you're matching buyers and sellers, you want as many eyeballs on the property. You want as many buyers looking at a house and they're going to have a very strong position at the end of that. So we're still constructive on end and we got like part of why we travel and made this management team to get a sense of what's happening in the business, what's the competitive threats. [ Safer ] is well aware of the narrative that's out there and he's assessing, I guess, all the different options. But from an earnings standpoint and the pathway for average revenue per lease to go up, they're still feeling very comfortable there.

We just had a follow-up question from George. You said that you mentioned Rightmove in your Hemnet discussion. Do we own that one? Catriona?

Yes, sure. So we don't. I mean we know the space very well. We've owned Scout 24, which is the equivalent business in Germany in the past. We prefer the model of REA and Hemnet than Rightmove and Scout. We still think they're all great businesses. As we talked about earlier awesome network effects, et cetera. But the pays model that is used by REA and Hemnet, we think has much better monetization opportunities. So whilst we think it has been a fantastic business, and actually, I saw -- I met 2 weeks ago, the CEO of Rightmove in my travels, I think it's a great business, but I think the better opportunity right now is Hemnet.

Thanks, Catriona. And sticking with you this last one from Graham. I know we can't offer financial advice, but he says he does hold shares in WAM Capital, should he sell and buy more in WAM Global?

Thanks, Graham. So I would not provide financial advice. But in terms of -- I mean we WAM versus WGB, they're very different in their underlying exposures. WAM, as you're well aware, invest in small mid-cap companies in Australia. We invest in undervalued growth companies globally with only about 2% or 3% of the portfolio in Aussie stock. So you're getting a very different set of underlying companies when you invest in WAM compared to WGB. And you get very strong dividends in WAM, I mean, as you do as well with WGB. And I wouldn't give any advice. The only thing I'd say is always obviously look at the discounts and the premiums but yes, generally, I think you just got to decide what are the exposures you want. And both companies are great in terms of -- if you had both they're very much a diversified portfolio of stocks, where you're getting global and use small mid and a fantastic. I mean the guys are fantastic in terms of the Oscar and Tobias and Shawn and Sammy and Kurt. It's a fantastic investment team. So you're getting a great investment team there and a great process that is the same at WAM Global, but you're just getting a different underlying portfolio of stocks, owning WGB compared to WAM.

Thanks, Catriona, and that's all the questions. If you have any additional questions, always please ride into us or give us a call. And I'll just turn back to Catriona for some closing words.

Great. Thank you. So on behalf of myself and the team, a big thank you to all of you for joining us for fantastic set of questions. As we said at the outset, this is your company. We're here to answer your questions if the things you want to write in or call going forward, absolutely anytime we welcome that. And as we said, we look forward to updating you very shortly. For those that can please come to our upcoming shareholder presentations, and we look forward to updating you at the next webinar or the next time we see you. So thank you again.