| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 5.1% | 0.8% | 4.6% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 4.6% | 6.0% | 6.5% | 0.2% | 1.6% | 2.1% |
PM Capital's Enhanced Yield Fund delivered a positive 0.8% return for the December quarter despite significant bond market volatility driven by re-emerging inflation concerns. Australian bond yields surged with three-year bonds rising over 60 basis points as market expectations shifted from potential rate cuts to multiple rate increases in 2026. The fund strategically increased exposure to fixed interest rates, viewing market optimism about cash rate increases as overdone given ongoing cost-of-living pressures and elevated house prices. Portfolio positioning emphasized defensive sectors, with strong performance from holdings in dominant supermarket businesses Coles, Woolworths, and Tesco. The fund also increased investment in global industrial bonds like Vallourec while reducing exposure to Qube following takeover interest. Management maintains a conservative credit positioning given global economic uncertainties including potential US tariffs and Federal Reserve policy risks. With approximately 0.7 years exposure to fixed rate investments and ample capital available, the fund is positioned to capitalize on volatility while delivering consistent income above cash rates.
The Enhanced Yield Fund focuses on delivering returns in excess of the RBA cash rate through a diversified portfolio of fixed income securities while maintaining a conservative approach to credit risk in an uncertain economic environment.
The fund maintains a relatively conservative credit market positioning overall given economic uncertainties. With increasing exposure to fixed rate yields and ample fund capital available, management believes they are well positioned to weather near term volatility and take significant advantage of it.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 10 2026 | 2025 Q4 | 2282.HK, 8570.PA, APO, BAER.L, BHP.AX, CABK.MC, CGF.AX, COL.AX, CRN.L, CS.AX, FCX, FDV.AX, FOXA, HEIA.AS, IMI.L, INGA.AS, LLOY.L, NEM, NSC, NST.AX, QUB.AX, RPRX, SHL.DE, SMR.AX, TECK, TSCO.L, UNP, WDS.AX, WOW.AX | Bonds, credit, fixed income, inflation, rates, Yield | - | Despite signs of re-emergence of higher inflation across major global developed economies including Australia in the December quarter, the fund delivered positive returns. Australian bond… |
| Oct 20 2025 | 2025 Q3 | - | - | - | - |
| Jul 23 2025 | 2025 Q2 | - | - | - | - |
| Mar 31 2025 | 2025 Q1 | - | - | - | - |
| Dec 31 2024 | 2024 Q4 | - | - | - | - |
| Sep 30 2024 | 2024 Q3 | - | - | - | - |
| Jun 30 2024 | 2024 Q2 | - | - | - | - |
| Mar 31 2024 | 2024 Q1 | - | - | - | - |
| Dec 31 2023 | 2023 Q4 | - | - | - | - |
| Sep 30 2023 | 2023 Q3 | - | - | - | - |
| Jun 30 2023 | 2023 Q2 | - | - | - | - |
| Mar 31 2023 | 2023 Q1 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
InflationInflation has continued to be a persistent feature in Japan and has prompted changes in both corporate and consumer behavior. Importantly, inflation has fed through to corporate earnings and equity performance. Companies that have successfully passed on higher costs to consumers have benefited from improved operating margins. |
Inflation Corporate Earnings Operating Margins Consumer Behavior Cost Pass-through |
RatesFederal Reserve resumed rate-cutting cycle with first cut since December 2024, signaling resumption of easing. Expected three cuts of 25bps between now and first quarter 2026 as Fed responds to signs of weakness in US labor market. |
Fed Monetary Policy Labor Market Easing Liquidity |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| 2282.HK | MGM China weighed on performance for the quarter after a late-December announcement of a renewed branding agreement which doubled the branding fee payable to the parent company, MGM Resorts. |
| 8570.PA | We increased our investment in the bonds of global industrial pipe manufacturer Vallourec in October, at a yield of approximately 6% |
| APO | The decision to add to Apollo was driven by a pronounced valuation disconnect as the stock experienced a peak-to-trough drawdown of approximately 30% from its 2025 highs. Apollo retains a core position in the portfolio with our conviction in its key credit franchise. |
| BHP.AX | BHP delivered +7% performance as copper and gold positions continued to make a meaningful contribution to performance, supported by higher commodity prices. |
| CABK.MC | We funded these buys by trimming Spanish lender CaixaBank on strength. |
| CGF.AX | Our conviction in Challenger Limited continues to yield strong results, with the position rising 8% over the quarter and achieving a 57% return for the year ending 31 December 2025. Investors are increasingly pricing in the anticipated benefits of APRA's proposed capital requirement reforms. |
| COL.AX | our holdings in the two dominant Australian supermarket businesses, Coles and Woolworths, performed well during the quarter |
| FCX | Freeport McMoRan was able to recover the share price drawdown seen in September following a major mudflow event at their Grasberg mine, which resulted in a full suspension of production and a material cut to guidance. The share price finished 2025 at its high. |
| FDV.AX | Frontier Digital Ventures was the main detractor to performance over the period retracing the strong performance witnessed in the preceding quarter. |
| FOXA | Fox Corporation was sold in December as its share price now more fully reflected its core operational strength and the value of ancillary assets. Over our investment period the share price doubled as the market reassessed Fox's competitive positioning and earnings quality. |
| HEIA.AS | Heineken (+8%) |
| IMI.L | Our position in UK-listed IMI plc bolstered portfolio performance. As a global leader in the engineering of mission-critical valves and actuators, IMI provides essential fluid and motion control solutions strategically aligned with structural growth drivers. Since our initial entry in August 2024, the position has delivered substantial capital appreciation, rising over 40%. |
| INGA.AS | At the opposite end of the risk spectrum sits European bank ING Groep, which has also been an important contributor over recent years. The Fund first acquired shares in this conservatively capitalised bank in late 2023 at around €12 per share, a discount to tangible book value. The stock has doubled over the subsequent two years. |
| LLOY.L | Lloyds Banking Group was among the rate-sensitive majors leading European banking sector outperformance. Sector returns have been underpinned by the stabilisation of short-term interest rates and a subsequent steepening of the European yield curve. |
| NEM | Newmont delivered +18% performance over the quarter, contributing meaningfully to portfolio returns as gold gained another 12%, taking its 2025 gains to an extraordinary 64%. |
| NSC | Norfolk Southern merger with Union Pacific would create the first transcontinental rail network in the United States. We believe this provides a credible pathway to renewed volume growth and further productivity gains in an otherwise mature industry. |
| NST.AX | Northern Star Resources delivered +13% performance contributing meaningfully to portfolio returns as gold positions continued to make strong contributions supported by higher commodity prices. |
| QUB.AX | Qube Holdings was one of the largest positive contributors to performance during November for both funds. |
| RPRX | Thirty years later, the company he founded, Royalty Pharma, generates over $2bn per year in cash flow, produced by royalties on a highly diversified collection of drugs, including 7 of the top 30 in the US. The company has a 40-50% market share of all pharma royalties and remains dominant today, despite attempts at competition from large private equity firms like Blackstone. |
| SHL.DE | During the quarter, we also initiated a position in Siemens Healthineers, a global leader in medical imaging and advanced therapies. The company is well placed to benefit from structural megatrends, such as aging demographics, greater emphasis on personalised care and the rising prevalence of chronic diseases. |
| SMR.AX | In steelmaking coal, Stanmore Resources remains resilient despite low commodity prices that have seen peers take measures to preserve cash. Stanmore has maintained consistent mine plans and capital expenditure programs and is therefore well positioned to benefit from any improvement in commodity prices. |
| TECK | Teck Resources and Anglo American announced a merger of equals that would create world's fifth-largest copper miner. Benefits include the ability to integrate Teck's Quebrada Blanca II with Anglo's neighbouring Collahuasi mine. |
| TSCO.L | Tesco, a UK-based multinational grocery and retail company operating a leading supermarket chain. Now one of our top 10 holdings in the portfolio, Tesco continues to benefit from its scale advantages and price leadership, which have allowed it to gain market share despite a competitive environment and a UK consumer backdrop that remains value conscious. At the same time, margin contributions from initiatives in retail media and continued share repurchases support earnings growth without requiring an improvement in consumer spending. |
| UNP | Union Pacific, the largest freight rail operator in the western United States, has announced plans to merge with Norfolk Southern, one of its major eastern counterparts. If approved, the merger would create the first coast-to-coast rail network in the U.S. |
| WDS.AX | The fund closed its position in Woodside during the quarter amid growing concerns around the company's commodity exposure, particularly the multi-billion-dollar Louisianna LNG project. |
| WOW.AX | our holdings in the two dominant Australian supermarket businesses, Coles and Woolworths, performed well during the quarter |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||
