Wealth Defender Equities Limited (ASX: WDE) is a listed investment company that invests in mid-cap stocks; a segment of the market that most investors are under-represented in.
The portfolio will be managed by Perennial Value Management, a fund manager with a long record of accomplishment of outperformance.
A unique feature of this company is its risk management strategy, with the company aiming to provide around 50% of capital protection against moderate market falls.
This strategy will allow investors to enjoy the long-term benefits of investing in shares while providing reduced risk to investor capital through a range of professionally managed strategies designed to cushion the portfolio in significant market downturns.
This should lead to an enhanced outcome over the long-term.
There is a high level of key person risk with this company with two of the senior personnel having significant industry experience, which would be hard to replace in the event of their departure.
This company is suitable for those investors seeking capital growth and income, with reduced capital risk.
We believe the gross dividend yield will be approximately 6.5%. It is trading at $0.96 slightly below the asset backing of the company of $0.99 per share.
The fund aims to outperform the ASX 300 index and is suited for investors with smaller amounts who are chasing exposure to these sectors without the risk of selecting individual companies.
WDE provides a low-risk structure to gain exposure.
The company floated in May at $1 per share with subscriptions double of what was requested. Since then the price has traded below the Net Tangible Assets as investors watch, how the money was being invested.
WDE is a long-term investment that should provide less volatility and solid long-term growth, which is currently trading at a discount.