Thanks Carbonite sounds like you are mostly in agreeance in these LIC options not providing a great deal of benefits to shareholders. When you say there are 2 key differences, I don’t seem them as being all that much different. In terms of share price exceeding option strike price I don’t see that as being much different to option issues in the past. What I mean by that is firstly at the time they released the announcement, the share price was basically 2.54 also. It was only later on that they hit 2.60. They decided to have an option strike price the same as the share price at the time. A bit like in the old LIC IPOs where they would set the IPO price $1, quite often this matched the option strike price. The other difference about allowing shareholders time to buy in to get the option also kind of existed with IPOs. That is those that go in the float get the options, then when they start trading new buyers do not get such options. Kind of like here when around March 10 they trade ex the options entitlement. Very good point you make also about potential halving of existing profit reserves and franking credits when measured per share, I didn’t cover that in my earlier post. When you talk about only diluting the NTA slightly you are referring to a hypothetical if the NTA is around 2.60 at the time. In that case you are right, not much dilution. However these options can be exercised at any time until expiry up to September 12, 2022. That is a long time away so if the bull market keeps running and their portfolio NTA surges to say $3.50, how about the dilution then from doubling the share count issuing cheap shares at $2.54? Whilst it is in WAM Global’s interest to talk up exercising your options as soon as possible and rush in before a dividend, many options will still exist up until September 2022. You might be right about some share price weakness around March 11. I won’t try and predict what might happen because I am still seeing WGB shareholder excited over their “free gift” in this announcement. On another forum some seem to believe WGB has magically created about 20 cents of extra value overnight with this deal. That is why LICs do this I suspect, they are well aware many small shareholders have never heard of dilution, so they can potentially capitalize on this. I find it a tricky situation to guess share price movements with WAM LICs generally as I never would have imagined WAM / WAX stay so long at circa 30% premiums. Anything is possible here with WGB!

Yes I see now @Carbonite originally you were quite clear about potential NTA dilution could be greater if NTA rises, I read it too quickly the first time. Good to get some feedback from someone who owns and understands it. I don't blame you for selling as it seems to me strange the shares bounce from 2.54 to 2.63 quickly off the back of this announcement. Since the announcement global markets are softer if anything, and it doesn't appear to me that this deal magically creates value for shareholders.

I was previously an investor in WGB but no longer invested. I hold WMI. I think the biggest winner out of this proposal is Wilson rather than investors. I hope they provide monthly NTA on a pre-diluted and post-diluted basis until all options are exercised or expired. I doubt this will be the case as Wilson don't provide performance based on after fee return or NTA return but the underlying fund performance before these costs. This is something I really detest about Wilson as it significantly inflates the real return investors can expect. I keep my own spreadsheet of monthly NTA to judge actual performance. If you would like to see the effect of options take a look at Ryder capital LIC (ASX:RYD) (I own for disclosure). You can find monthly NTA data here http://rydercapital.com.au/nta/ . I am an investor well below option price so I was happy if they made it to the point I would get diluted. Currently, if all options were exercised their would be approximately a 38% increase in shares on issue (compared to WGB's 100%). Looking through the monthly NTA reports of Ryder you can see the large effect of dilution that occurs as the NTA extends well beyond the strike price of the options. Given WGB's larger option issue this effect will be more pronounced this will have a negative impact on actual returns. I would want to know if the way Wilson report's their returns will indicate this dilution (in terms of portfolio return figures not NTA price). I think the gold standard is Magellan. They are providing an option for 7.5% discount to NTA at time of exercise. The discount is fully funded by Magellan themselves as to not dilute the unit holders.

Just found this reply from you (to me) from 2 years ago Strawman. Looks like you found the solution by replacing Morningstar with another data provider. You appear to have all of the LICs on board Strawman.com now, just not the ETFs. Any idea when the ETFs will get added?

It's been on the list for a long time, but we'll increase the priority as others have requested this too. I'd say we'll get ETFs added to Strawman in the next month or so.