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| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
The Airlie Australian Share Fund returned 10.6% for the quarter net of fees, outperforming the S&P/ASX 200 by 6.5% after fees, though the fund underperformed by 2.0% for the full fiscal year. The quarter saw a sharp reversal of headwinds that had weighed on performance, with materials holdings (BHP, RIO, BlueScope, Ampol, IGO) rallying over 50% as markets scrambled for real assets, and USD earners (Aristocrat, Resmed, News Corp) rebounding as the AUD peaked. The manager maintains a large 10% underweight in Australian banks, viewing them as overvalued heading into a deteriorating outlook with rising rates slowing credit growth, aggressive competition from Macquarie, and the Federal Budget's ban on negative gearing threatening investor loan margins. The manager expects earnings downgrades and P/E de-rating for banks to create a headwind for the index, while seeing best opportunities in quality industrials like Car Group, Pinnacle, Orica, News Corp and Resmed that have de-rated sharply but offer strong EPS growth. The changing market structure with increased passive and quantitative strategies is creating enhanced volatility that the manager views as opportunity rather than threat, as demonstrated by adding to BlueScope and James Hardie following MSCI index deletions, with both positions subsequently up 48%.
Airlie maintains a concentrated, high-conviction portfolio of 15-35 Australian equities focused on exploiting the tension between slow-moving primary market fundamentals and increasingly fast-moving secondary market valuations driven by passive flows and earnings-revision strategies.
FY27 looks like a fantastic setup for active stock pickers with significant headwinds that weighed on performance over the preceding 12 months now reversing sharply and turning to performance tailwinds. With a quarter of the index in expensive banks facing a slowdown and a quarter in cyclical miners coming off a strong year, the best opportunities lie in quality industrials that have de-rated sharply over the last 12 months. The manager welcomes the increased volatility from changing market structures as it enhances the opportunity set for fundamental active investors.
As of Jul 21, 2026
The fund is actively managed by an experienced team led by Matt Williams (Head of Australian Equities with over 25 years experience), Emma Fisher (Deputy Head with over 13 years investment experience), and Joe Wright (Deputy Portfolio Manager). Matt Williams joined Airlie in July 2016 and emphasizes maintaining discipline and staying true to the investment process. Emma Fisher focuses on helping investors think like business owners and look beyond negative headlines. Joe Wright emphasizes discipline and investing in companies with operational excellence during volatile markets. The team acknowledges limited ability to predict short-term macro shocks and instead devotes research efforts toward understanding business economics and valuing businesses relative to market prices.
Airlie employs an 'undervalued quality' investment approach, seeking instances where quality businesses are trading at attractive prices. The firm uses a bottom-up investment approach with a belief that active management can produce significant wealth accumulation relative to passive management. The investment process follows a systematic four-pillar approach focusing on financial strength, business quality, management competency (with preference for founder-led businesses), and valuation applied last. Only companies with solid financial characteristics and appropriate debt levels are considered investible, with a focus on competent managers whose interests align with shareholders.
Lead Portfolio Manager
Emma Fisher
Managing Partner
Moderate Conviction Bullish
Market Conviction
The fund demonstrates high conviction through its concentrated 15-35 stock portfolio (currently appears to be around 25 positions based on top 10 representing core holdings), explicit position sizing language (large 10% underweight in banks, large positions in Aristocrat/Resmed/News Corp, halved and re-added positions), and willingness to act decisively on volatility (adding to index deletions, trading around currency moves). The manager names specific positions, discusses sizing changes, and articulates clear theses with falsifiable catalysts. However, the diversified nature across 20+ positions and some hedging language (we believe, in our view) prevents a score above 0.75. The explanation and score are consistent: named positions with sizing discussed across a moderately concentrated portfolio.
Growth Outlook
The manager expresses optimism for the fund's future returns in FY26 (0.65) while maintaining caution regarding general market valuations, particularly pointing out the extreme valuation premiums of the major banks like CBA and Westpac relative to their long-term averages.
Risk Appetite
Airlie displays a robust risk appetite (0.70) by actively deploying capital into new high-conviction ideas like Goodman Group and Aspen Group and increasing weights in core compounders like CSL, while completely divesting from underperforming names that no longer pass their process.
Capital Deployment
The deployment activity represents capital rotation rather than net deployment or de-risking. The manager trimmed materials positions after 50%+ gains (BHP, RIO, BlueScope, Ampol, IGO) and used these gains as a funding source for new ideas in quality industrials. The manager also traded around Aristocrat (halving then re-adding) and added to index deletion opportunities (BlueScope, James Hardie). No cash level changes are disclosed, and the activity described is primarily rebalancing from winners to new opportunities rather than net new capital deployment or cash raising. This qualifies as rotation and scores near 0.00 to +0.10.
Forward Guidance
The forward guidance score of 0.60 reflects the manager's steady hands-on approach, looking forward to FY26 with optimism while focusing on refinement of their bottom-up investment process rather than aggressive portfolio-wide reallocation.
Language Signal
The language balance tilts modestly positive but with significant risk framing. Bullish language includes fantastic setup, best opportunities, strong EPS growth, attractively priced, enhances opportunities, and tailwinds. Bearish language includes overvalued, deteriorating outlook, headwinds, expensive, slowdown, downgrades, de-rating, and concerns. The manager frames changing market structure positively (enhances opportunity set) but devotes substantial discussion to bank risks and index headwinds. The net balance is mildly positive with meaningful caution embedded throughout.
Perceived Risk
The perceived risk score is 0.55. While the manager notes trade policy reforms and brief market corrections, they classify these macro events as short-term noise irrelevant to the long-term compounding capability of quality businesses.
Opportunity Density
The manager characterizes the environment as a fantastic setup for active stock pickers with multiple specific opportunities identified. Quality industrials (Car Group, Pinnacle, Orica, News Corp, Resmed) are described as attractively priced with strong EPS growth potential. The manager also sees opportunities created by market structure volatility (index deletions, currency moves) and is finding new ideas to fund with materials gains. While noting that a quarter of the index (banks) faces headwinds and another quarter (miners) has limited upside, the manager frames this as enhancing selectivity rather than limiting opportunities. The tone is opportunity-rich within defined areas rather than broad-based abundance.
Time Horizon
The manager demonstrates a multi-year investment horizon with willingness to hold through volatility. The fund maintained Aristocrat holdings through a 44% price swing over 12 months, explicitly stating nothing fundamentally changed for long-term earnings power. The Ridley case study emphasizes multi-year return improvement and scale economies shared dynamics that play out over time. However, the manager also actively trades around positions (halving and re-adding Aristocrat, trimming materials after gains) and discusses near-term catalysts like earnings revisions and index inclusion events. This represents a 2-4 year core horizon with tactical trading around positions, consistent with a public equities fund structure.
Top Conviction Themes
Key Catalysts
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