| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.4% | 10.6% | 5.5% |
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.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 15 2026 | 2026 Q2 | ALD.AX, ALL.AX, ANZ.AX, BHP.AX, BSL.AX, CAR.AX, CBA.AX, IGO.AX, JHX.AX, MQG.AX, NAB.AX, NWS, ORI.AX, PNI.AX, RIO.AX, RMD, STO.AX, WBC.AX, WES.AX | active management, Australian Equities, banks, Currency, earnings revisions, materials, Quality, valuation | - | Airlie delivered 10.6% in Q2 2026, outperforming by 6.5% as materials and USD earners reversed prior headwinds. The fund maintains a large underweight in expensive Australian banks facing deteriorating fundamentals from slowing credit growth and negative gearing bans, expecting earnings downgrades and de-rating. Best opportunities lie in quality industrials that have de-rated sharply. Changing market structure creates enhanced volatility the manager exploits through active trading around core positions. |
| Sep 30 2025 | 2025 Q3 | ALD.AX, ALL.AX, APZ.AX, BHP.AX, BSL.AX, CBA.AX, CHC.AX, CSL.AX, EBO.AX, GMG.AX, MQG.AX, NCK.AX, NWSA, RMD, SOL.AX | Australia, banks, equities, gold, real estate, value, volatility | - | Airlie Australian Share Fund underperformed in Q3 2025 due to CSL and EBOS earnings disappointments and underweight Big Four banks positioning. Despite elevated ASX valuations at 20.7x forward P/E with minimal EPS growth, the manager sees high market volatility creating opportunities for active stock selection based on intrinsic value analysis. |
| Jun 30 2025 | 2025 Q2 | 300750.SZ, 6920.T, 9988.HK, CLS, CRM, HAL, HIMS, ICE, ISRG, KGHM.WA, KRN.DE, KVUE, LRCX, PEP, TSM, UMC.PA, UNH, UPWK, VNA.DE, ZAL.DE | AI, China, energy, Germany, healthcare, semiconductors, value | - | ACATIS capitalized on AI infrastructure boom with semiconductor equipment manufacturers driving strong September returns. Chinese stimulus sparked recovery in technology names like Alibaba. New investments target data centers, telemedicine, and critical metals. German digitalization efforts and Argentine reforms provide regional catalysts. Maintaining value discipline while positioning for AI expansion and selective emerging market recovery opportunities. |
| Mar 31 2025 | 2025 Q1 | 1211.HK, 6857.T, 8035.T, AMAT, AMZN, ASML, AVGO, CRM, DDOG, ENTG, FTNT, GOOGL, INTU, LSEG.L, MDT, MSFT, NOW, ORCL, TMO, ZS | AI, Bubble, Cloud, growth, infrastructure, semiconductors, technology |
AVGO ORCL ASML META 1211.HK MSFT |
Strong Q3 performance driven by AI infrastructure leaders Oracle, Broadcom, and ASML despite growing bubble concerns. Manager trimmed winners for risk management while adding Medtronic and BYD on underappreciated growth potential. Maintains conviction in long-term AI opportunity through quality companies with defendable moats, balancing opportunities with rising risks through fundamental research and selective positioning. |
| Dec 31 2024 | 2024 Q4 | - | AI, Federal Reserve, Labor Market, Rate Cuts, small caps, technology | - | Markets hit new highs in Q3 as the Fed began cutting rates and AI investment accelerated to the fastest pace since the late 1990s. Small caps outperformed on rate cut expectations while technology spending drove economic growth. The market expects a soft landing but Q4 will be data-dependent with AI valuations creating potential volatility despite multi-year investment cycle fundamentals. |
| Sep 30 2024 | 2024 Q3 | - | Fed policy, inflation, Market Volatility, rates, tariffs, Trade Policy | - | Trade policy volatility dominated 2025's first half, driving dramatic market swings from Q1 selloff to Q2 recovery. Despite tariff uncertainty causing inflation expectations to rise and Fed policy to pause, markets proved resilient with S&P 500 ending near records. The rebound suggests markets view tariff impacts as modest and temporary, though uncertainty persists. |
| Jun 30 2024 | 2024 Q2 | - | AI, diversification, growth, Optimism, technology, Valuations | - | Financial Synergies maintains an optimistic Q3 2025 outlook despite elevated 38x Shiller P/E valuations, citing declining rates, controlled inflation, and AI-driven opportunities. Unlike the dot-com era, current market leaders have strong fundamentals. The firm advocates diversified portfolios across market caps and sectors to manage concentration risk while emphasizing that patient, long-term investors are historically rewarded. |
| Mar 31 2024 | 2024 Q1 | - | Estate Planning, financial planning, Market Highs, Wealth management | - | Financial Synergies' educational newsletter highlights their internship program, provides estate planning guidance, and addresses investor concerns about market all-time highs. Historical data shows investing at market peaks has produced solid returns. The firm emphasizes combining technical wealth management expertise with understanding clients' emotional needs and deeper motivations for comprehensive financial planning. |
| Dec 31 2023 | 2023 Q4 | META | AI, Data centers, Investment, returns, technology, valuation | ADI|BDX|FI|FND|HAS|META|MSFT|MSI|ORCL|TMO | Massive AI infrastructure investments could unlock trillions or prove wasteful. Meta's $70 billion data center spending exemplifies smart AI deployment - using existing advertising strengths rather than seeking new models. Success requires only 4% revenue growth acceleration for double-digit returns. Companies controlling their own execution have higher success probability than those depending on external factors. |
| Sep 30 2023 | 2023 Q3 | 000660.KS, 005930.KS, 2330.TW, 300012.SZ, 300124.SZ, 9999.HK, BBCA.JK, CHILE.SN, FEMSAUBD.MX, NATU3.SA, RADL3.SA | AI, Brazil, China, emerging markets, Indonesia, Quality, semiconductors, valuation | - | Aikya's emerging markets fund underperformed in October despite positive returns, missing semiconductor rally due to quality-focused discipline. Indonesian banks benefited from improved sentiment while Chinese holdings faced correction headwinds. Latin American names showed mixed performance amid consumer slowdown. Fund maintains long-term focus on quality companies at sensible valuations rather than momentum chasing. |
| Jun 30 2023 | 2023 Q2 | ANTHROPIC, HOLOGIC, OPENAI | AI, deployment, energy, private equity, Take-privates, value creation | - | BXPE delivered 3.9% Q3 returns through record $1.3 billion deployment across high-conviction themes. Strong broad-based performance with 80% of investments appreciating, led by Franchisors and Digitization. Major moves include expanding energy exposure tenfold, executing large take-privates like Hologic, and strategic AI investments in OpenAI and Anthropic. Young portfolio with significant upside potential. |
| Mar 31 2023 | 2023 Q1 | 000660.KS, 004800.KS, 005930.KS, 009540.KS, 028260.KS, 090430.KS, 4527.T, 9301.T, C6L.SI, CDI.PA, ENT.L, G.DE, LVMH.PA, NWSA, REA.AX, VIV.PA | Discounts, Engagement, Holdings, Korea, NAV, value | NWSA | AVI Global Trust focuses on deeply discounted companies, building 9.5% Korean exposure amid governance reforms where 68% of KOSPI trades below book value. Korean holdings delivered 25% weighted returns. News Corp discount widened to 46% despite Dow Jones growth, but family trust resolution removes structural reform impediment. Compelling outlook for engaged value investors. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
BanksManager maintains a large underweight (~10%) in Australian Big Four banks, viewing them as overvalued heading into a deteriorating outlook. Negative catalysts include rising rates slowing credit growth, aggressive competition from Macquarie, and the Federal Budget's ban on negative gearing which threatens investor loan margins and credit growth. Manager expects earnings downgrades and P/E de-rating as consensus estimates appear too optimistic relative to slowing fundamentals. |
Banks Credit Growth Negative Gearing Valuation Earnings Downgrades |
MaterialsMaterials sector was the number one driver of quarterly performance, with the fund overweight diversified miners (BHP, RIO) and companies with tier-1 HALO assets (hard asset, low obsolescence) like BlueScope and Ampol. Portfolio holdings BHP, RIO, BlueScope, Ampol and IGO rallied over 50% during the year as markets scrambled for Real Assets. Manager has trimmed positions as valuation upside has diminished but maintains overweight exposure. |
Materials Diversified Miners HALO Assets Real Assets Copper | |
CurrencyThe AUD/USD exchange rate significantly impacted USD-earning portfolio holdings during the year. As the AUD rallied, AUD-denominated earnings expectations for companies like Aristocrat declined 7% despite flat USD earnings, causing share price weakness. The trend reversed in the quarter as the AUD peaked following the Federal Budget release, with USD earners rebounding sharply. Manager views currency-driven volatility as an opportunity to trade around core positions. |
Currency AUD USD Earnings Revisions Volatility | |
Market StructureManager discusses the changing market structure with increased passive, quantitative, and earnings-revision-driven strategies creating more volatility and faster value gap closures. Rather than viewing this as a threat, manager sees it as enhancing opportunities for fundamental active investors by creating tension between slow-moving primary market fundamentals and fast-moving secondary market valuations. Recent examples include MSCI index deletions creating 8-30% single-day moves followed by 48% recoveries. |
Market Structure Passive Investing Active Management Volatility Index Inclusion | |
EarningsManager emphasizes that earnings revisions have been a dominant driver of share price performance, often disconnected from actual earnings growth. Banks saw share prices rise 80% despite only 1% annual EPS growth due to positive revisions, while USD earners fell despite operational growth due to currency-driven downgrades. Manager expects this dynamic to reverse for banks with downgrades ahead, while USD earners benefit from improving revisions. |
Earnings Earnings Revisions EPS Growth Consensus Estimates | |
QualityManager sees best opportunities in quality industrials that have de-rated sharply over the last 12 months. Portfolio holdings such as Car Group, Pinnacle, Orica, News Corp and Resmed have begun to re-rate but remain attractively priced and offer strong EPS growth. The Ridley case study illustrates the manager's focus on businesses with improving incremental returns on capital under disciplined management teams. |
Quality Industrials Return On Capital Valuation Management | |
| 2025 Q3 |
GoldGold price up 16% in the quarter, outperforming S&P 500 by ~30% year-to-date. Historical correlation with US real yields has broken down, coinciding with Russia-Ukraine war and Western nations freezing Russian central bank funds. Central banks accelerating reserve diversification away from USD. |
Gold Reserve Diversification Central Banks USD Monetary |
AustraliaS&P/ASX 200 continues to look expensive relative to history, much due to Big Four banks. Index finished quarter on forward P/E of 20.7x, up 6% despite little EPS growth forecast. High volatility with almost 20% of ASX companies seeing 10%+ moves on earnings results. |
Australia ASX Valuations Banks Volatility | |
Real EstateCharter Hall rallied on optimism that rates have peaked, supported by strong FY26 EPS guidance. Aspen Group reported strong earnings ahead of expectations, with market gaining visibility on affordable housing development pipeline and margins from these developments. |
Real Estate REITs Housing Interest Rates Development | |
| 2025 Q2 |
AIAI infrastructure continues driving strong performance across semiconductor equipment manufacturers and data center suppliers. Companies like Lam Research, TSMC, and Bloom Energy are benefiting from continued AI expansion, with Bloom Energy securing potentially its largest project for a 900 MW power plant to supply AI data centers. |
Semiconductors Data Centers Infrastructure Equipment Power |
SemiconductorsWafer equipment manufacturers performed exceptionally well with strong demand for chip manufacturing equipment. TSMC maintains technological leadership and pricing power in the AI supply chain, while companies like Lasertec reported higher-than-expected business numbers with 18% sales revenue growth. |
Equipment Manufacturing TSMC Foundries Capacity | |
ChinaChinese equities rallied significantly on government stimulus targeting property, stock and consumer sectors, alongside anti-involution policies. Alibaba surged on stronger-than-expected results with 26% revenue growth in Cloud Intelligence Group and triple-digit AI-related product revenue growth. |
Stimulus Government Technology Cloud Recovery | |
Energy TransitionInvestment opportunities identified in companies supporting the digital infrastructure transformation, including power supply solutions for data centers and critical metals recycling. KGHM Polska Miedz represents strategic importance as Europe's only notable copper and silver producer for digital infrastructure development. |
Copper Silver Infrastructure Metals Power | |
HealthcareMixed performance in healthcare with medical technology companies facing challenges. Intuitive Surgical experienced valuation correction despite maintaining technological leadership, while telemedicine companies like Hims & Hers offer growth opportunities in discreet online healthcare access. |
Medical Technology Telemedicine Innovation Valuation Growth | |
| 2025 Q1 |
AIThe AI arms race among technology companies is in full flight with massive investments in AI infrastructure. The long-term opportunity in Generative AI keeps growing as adoption rates increase and usage broadens, with 77% of companies using Claude AI for automation patterns. However, risks are rising with more signs of an AI bubble forming. |
Artificial Intelligence Infrastructure Automation LLMs Bubble |
SemiconductorsASML maintains an almost unassailable competitive position for the next 10-15 years with High NA EUV technology being key for future growth. The company has a clear roadmap supporting chip shrink until at least 2040, positioning it for sustained double-digit growth. |
EUV Lithography High NA Chip Manufacturing Technology | |
CloudOracle's explosive cloud growth could make Oracle Cloud equal or larger than Google Cloud Platform by FY29-30, driven by massive AI training and inferencing contracts. Microsoft's Azure accelerated to 39% growth with strong momentum in AI-powered services as businesses rush to digitalize. |
Infrastructure Azure Oracle Cloud Hyperscaler Growth | |
Electric VehiclesBYD stands out as the most complete and defensible EV platform globally with deep vertical integration and 15-25% cost advantage over legacy OEMs. The company's expertise in electronics and batteries from its origin as the world's largest mobile battery maker provides a unique edge. |
BYD Vertical Integration Battery Technology Cost Advantage Manufacturing | |
| 2024 Q4 |
AITechnology-related investment grew 14% year-over-year in Q2, the fastest pace since the late 1990s, driven by AI industry buildout including high-performance computer chips, cloud architecture, and data center construction. Management teams across the AI supply chain report strong demand with spending plans in the hundreds of billions and order backlogs spanning years. AI enthusiasm has fueled outsized gains in technology and semiconductor stocks, though some question whether spending is outpacing potential revenue growth. |
Data Centers Semiconductors Cloud Technology |
RatesThe Federal Reserve delivered a 0.25% rate cut in September, ending its 9-month pause, framed as a risk management cut to keep economic expansion on track. The central bank updated its policy forecast to include two more rate cuts before year-end with potential for more in 2026. Treasury yields fluctuated but ended the quarter lower, with longer-maturity bonds outperforming due to higher sensitivity to falling interest rates. |
Federal Reserve Monetary Policy Treasury Bonds | |
Small CapsSmall-cap stocks rallied sharply in anticipation of the Fed's rate cut, with the Russell 2000 surpassing its previous high from 2021 and returning nearly 12%. Small caps posted their biggest quarter of outperformance over the S&P 500 since Q1 2021 as investors bet that rate cuts would benefit smaller companies. Cyclical sectors broadly outperformed their defensive counterparts. |
Russell 2000 Rate Cuts Cyclical | |
| 2024 Q3 |
Trade PolicyTrade policy uncertainty dominated the first half of 2025, with escalation in Q1 followed by de-escalation in Q2. The administration implemented targeted tariffs on China, Canada, and Mexico, then announced sweeping global tariffs before pivoting toward trade agreements. This volatility created distinct market environments across quarters. |
Tariffs China Trade War Policy Uncertainty |
InflationTariff uncertainty caused inflation expectations to rise sharply despite actual inflation remaining subdued. Consumer expectations diverged significantly from trailing inflation data, creating a debate about whether companies will pass through tariff costs or absorb them to remain competitive. |
Expectations Consumer Prices Tariffs Fed Policy | |
RatesThe Federal Reserve held rates steady due to trade policy uncertainty, facing a difficult tradeoff between potential tariff-driven inflation and economic growth concerns. Markets expect gradual rate cuts beginning in September, with approximately 1.25% of cuts anticipated over the next 18 months. |
Fed Policy Rate Cuts Monetary Policy Uncertainty | |
| 2024 Q2 |
AIAI represents incredible potential from curing diseases to improving productivity to reshaping how we live and work. The rapid rise of artificial intelligence is unsettling at times but offers endless opportunities. Current market leaders in AI are well established with strong profitability and healthy balance sheets, unlike unprofitable dot-com companies of the past. |
Technology Innovation Productivity Growth Disruption |
ValuationsCurrent Shiller price-to-earnings ratio of 38x is well above the historical average of 27x, indicating elevated market valuations. While stocks appear expensive by historical standards, valuations do not reliably predict near-term returns and markets can continue rising if business fundamentals remain strong. Opportunities exist across different market segments with more attractive valuations in Large Value and Small Caps. |
Metrics Earnings Premium Historical Fundamentals | |
| 2023 Q4 |
AIMassive investments in AI infrastructure could unlock trillions in economic output or prove wasteful. While skepticism is consensus, companies investing hundreds of billions believe these investments are necessary to preserve competitive advantages. The market has added over $7 trillion to tech valuations based on AI productivity expectations. |
Data Centers Infrastructure Productivity Investment Valuation |
Data CentersMeta increased annual capex from $20-30 billion to over $70 billion for data center development. The extra investment needs to increase revenue growth by 4% annually to generate double-digit returns. Returns depend on improved ad targeting effectiveness rather than finding new business models. |
Capex Infrastructure Returns Investment Computing | |
| 2023 Q3 |
AIThe market's continued excitement for AI potential led semiconductor stocks materially higher, with Taiwanese and Korean markets at record highs. While the fund believes in AI's long-term potential, they maintain quality and valuation discipline rather than chasing momentum. |
Semiconductors Taiwan Korea Technology |
QualityAikya's investment approach relies on quality as a key pillar, investing exclusively in high-quality companies. The strategy emphasizes quality discipline alongside valuation considerations in investment decisions. |
Investment Philosophy Discipline Fundamentals | |
| 2023 Q2 |
AIBlackstone continues to focus on the picks and shovels of AI through infrastructure investments such as chips and data centers, while the market's maturation has opened the door for measured exposure to the application layer. BXPE invested in OpenAI and Anthropic — two category-defining AI research labs with complementary strategies in consumer and enterprise use cases. |
Data Centers Infrastructure Applications Research Enterprise |
Energy TransitionAfter two decades of stagnation, US electricity demand is projected to rise by 40% over the next 10 years. One key reason is data centers, where over 80% of hyperscalers and operators cite power availability as their top growth constraint. Electrification and reshoring of manufacturing are also fueling this secular trend. |
Electricity Power Data Centers Electrification Manufacturing | |
DigitizationDigitization — investments tied to the global shift online — was a top contributor, accounting for 21% of Q3 performance. This theme represents the ongoing transformation of business models toward digital platforms and services. |
Digital Online Transformation Platforms Services | |
| 2023 Q1 |
South KoreaBuilding exposure to Korea due to ongoing corporate governance reform agenda and rich array of deeply undervalued companies. Korean names have contributed +1.1% to NAV with weighted average total return of +25%, driven by strong performances at HD Hyundai, Hyosung Corporation and Samsung C&T. 68% of KOSPI index still trading below book value and 61% without sell-side coverage. |
Corporate Governance Value Discounts Reform |
ValueFocus on companies whose share prices stand at a discount to estimated underlying net asset value. News Corp trading at significant discount with REA stake accounting for 75% of market cap. Amorepacific Holdings now trades on widest ever discount of 52%. Outlook compelling for nimble, fundamental-focused investors with experience of active engagement. |
Discounts NAV Undervaluation Engagement |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 15, 2026 | Fund Letters | Airlie Australian Share Fund | - | Ridley Corporation | Packaged Foods | Agricultural Products | Bull | Australian Securities Exchange | Agricultural Products, Animal Nutrition, Australia, capital allocation, Equity, Feedmills, Fertiliser Distribution, high-ROIC, Management Change, Scale Economies Shared, turnaround, Value | Login |
| Sep 30, 2025 | Fund Letters | Airlie Australian Share Fund | AVGO | Broadcom Inc. | Information Technology | Semiconductors & Semiconductor Equipment | Bull | NASDAQ | AI infrastructure, Enterprise software, growth, Networking, semiconductors, Xpu | Login |
| Sep 30, 2025 | Fund Letters | Airlie Australian Share Fund | ORCL | Oracle Corporation | Information Technology | Software | Bull | NYSE | AI infrastructure, Cloud computing, growth, hyperscaler, Software, transformation | Login |
| Sep 30, 2025 | Fund Letters | Airlie Australian Share Fund | ASML | ASML Holding N.V. | Information Technology | Semiconductors & Semiconductor Equipment | Bull | NASDAQ | EUV technology, growth, Lithography, Monopoly, Netherlands, semiconductor equipment | Login |
| Sep 30, 2025 | Fund Letters | Airlie Australian Share Fund | META | Meta Platforms, Inc. | Communication Services | Interactive Media & Services | Bull | NASDAQ | AI technology, digital advertising, growth, social media, user engagement | Login |
| Sep 30, 2025 | Fund Letters | Airlie Australian Share Fund | 1211.HK | BYD Company Limited | Consumer Discretionary | Automobiles | Bull | HKEX | automotive, battery technology, China, Electric Vehicles, growth, vertical integration | Login |
| Sep 30, 2025 | Fund Letters | Airlie Australian Share Fund | MSFT | Microsoft Corporation | Information Technology | Software | Bull | NASDAQ | AI technology, Azure, Cloud computing, enterprise, growth, Software | Login |
| Oct 31, 2025 | Fund Letters | Airlie Australian Share Fund | NWSA | News Corp | Communication Services | Publishing | Bull | NASDAQ | Asset Spin-off, Australia, discount to NAV, Dow Jones, Family Trust, information services, media, Publishing, REA Group, value unlock | Login |
| Oct 21, 2025 | Fund Letters | Airlie Australian Share Fund | ADI|BDX|FI|FND|HAS|META|MSFT|MSI|ORCL|TMO | Meta Platforms Inc | Communication Services | Interactive Media & Services | Bull | NASDAQ | Ad Targeting, Artificial Intelligence, capital expenditure, cash flow generation, data centers, digital advertising, revenue per user, social media, technology infrastructure, user engagement | Login |
| TICKER | COMMENTARY |
|---|---|
| ALL.AX | The top three relative contributors to gross performance during the quarter were Aristocrat (+37%), BlueScope Steel (+24%) and BHP (+18%). Taking Aristocrat as an example, consensus expectations for USD-denominated earnings were flattish over the last two years. In July 2025, brokers expected Aristocrat to deliver US$1.80 of EPS in September 2026, and as at July 2026 they still expect US$1.80 EPS. However, when we look at AUD-denominated earnings expectations, we can see that earnings expectations declined 7% as the AUD rallied against the USD. Over this period, the Aristocrat share price fell 30%. It has since rebounded 30% from its lows since May, as the AUD peaked with the release of the Federal Budget. Now, we are not suggesting that the appreciation of the local currency alone caused Aristocrat's underperformance during the year; that would be an error of correlation vs causation. We could think of the AUD/USD currency relationship as a shorthand expression of the perceived relative strength of the Aussie vs US economies. To the extent that the USD began to rally in May, it likely reflects improving economic fundamentals and outlook for the USD (certainly vs the Australian outlook) and hence it makes sense that investors should suddenly seek USD-related exposure via Aristocrat. However, we believe the volatility is increasingly exacerbated by the rise in non-fundamental active equities strategies that sell earnings downgrades and buy earnings upgrades. This enhances what we love about active investing: nothing has fundamentally changed for Aristocrat's long-term earnings power within 12 months, yet the share price within the last 12 months ranged from $44 to $78 – a 44% swing! While we maintained a holding in Aristocrat over the full period, we halved our position in the $70s, and added back to our position in the $40s and $50s. |
| BSL.AX | The top three relative contributors to gross performance during the quarter were Aristocrat (+37%), BlueScope Steel (+24%) and BHP (+18%). As ever with cyclical businesses, the privileged nature of these assets was not priced into the shares until the commodity prices turned, whether it be refiner margins ripping on the closure of the Strait of Hormuz, US steel spreads rising 50% or copper rallying 30-40% over the year. Positive earnings revisions and the emergence of market narratives like the 'HALO' moniker have left many market participants chasing the shares higher; we like to say we liked Ampol, BlueScope and BHP before they were cool. With portfolio holdings BHP, RIO, BlueScope, Ampol and IGO up >50% this year as the market scrambles for Real Assets, we have pulled back our positions. In November 2025, BlueScope and James Hardie were announced as (surprise) MSCI Australia index deletions. BlueScope fell 8% to $21 and James Hardie fell 30% to $25 over the course of two days. We added to our position in BlueScope and re-entered James Hardie. Today, BlueScope trades at >$31, and James Hardie at >$37, both stocks up an incredible 48% since the index deletion event. |
| BHP.AX | The top three relative contributors to gross performance during the quarter were Aristocrat (+37%), BlueScope Steel (+24%) and BHP (+18%). We wrote extensively in our December quarterly about Airlie's view on stock-picking in the resources sector, with a preference for diversified miners (BHP, RIO) and miners with tier-1 assets like IGO. As ever with cyclical businesses, the privileged nature of these assets was not priced into the shares until the commodity prices turned, whether it be refiner margins ripping on the closure of the Strait of Hormuz, US steel spreads rising 50% or copper rallying 30-40% over the year. With portfolio holdings BHP, RIO, BlueScope, Ampol and IGO up >50% this year as the market scrambles for Real Assets, we have pulled back our positions. |
| WES.AX | The top three relative detractors from gross performance were Wesfarmers (+24%-not held), Resmed (-10%) and Santos (-10%). |
| RMD | The top three relative detractors from gross performance were Wesfarmers (+24%-not held), Resmed (-10%) and Santos (-10%). We had included the table below in our December quarterly, lamenting the headwind that USD earners in the portfolio (exemplified by our large positions in Resmed, Aristocrat and News Corp) were performing well operationally, yet share prices were falling over CY25. Portfolio holdings such as Car Group, Pinnacle, Orica, News Corp and Resmed have begun to re-rate but remain attractively priced and offer strong EPS growth. |
| STO.AX | The top three relative detractors from gross performance were Wesfarmers (+24%-not held), Resmed (-10%) and Santos (-10%). |
| CBA.AX | We have talked ad nauseam about our view that the Big Four Australian Banks were overvalued vis-à-vis both the cyclical outlook (rising rates to slow credit growth) and the structural outlook (aggressive newish entrant Macquarie looking to become the Big Fifth bank via sharp deposit pricing). Indeed, it is somewhat unbelievable that CBA remains over $160 a share, on 24x earnings and >3x P/B, despite this remarkable deterioration in the outlook. |
| WBC.AX | Westpac is a great illustration of the changing market forces driving share prices. In FY23 it generated $1.99 cash EPS. By FY25, this had grown a paltry 2%, to $2.04 – for a CAGR of 1% earnings growth p.a. Given the S&P/ASX 200 long-run earnings growth of c. 4% p.a., you might expect Westpac to have underperformed. However, the share price rallied 80% over this period. What was it that the market responded to? We believe it was the earnings revisions: in November 2023, sell-side consensus expectations were for Westpac to earn $1.80 EPS in FY25. So while Westpac delivered very little actual earnings growth over the two years from November 2023 to November 2025, the $2.04 it delivered was 14% ahead of what was expected. |
| NAB.AX | Consensus expects the Big Four to compound EPS at 3-10% p.a. for the next three years. We believe this looks too high. We note the 10-year EPS CAGRs for the banks are well below this rate. |
| ANZ.AX | Consensus expects the Big Four to compound EPS at 3-10% p.a. for the next three years. We believe this looks too high. We note the 10-year EPS CAGRs for the banks are well below this rate. |
| JHX.AX | In November 2025, BlueScope and James Hardie were announced as (surprise) MSCI Australia index deletions. BlueScope fell 8% to $21 and James Hardie fell 30% to $25 over the course of two days. We added to our position in BlueScope and re-entered James Hardie. Today, BlueScope trades at >$31, and James Hardie at >$37, both stocks up an incredible 48% since the index deletion event. The deletion of a company from an index leads to a reduction in the number and type of shareholders who can own the stock, however it does not change the future cashflows of a company. Ironically, James Hardie is now being touted as a potential MSCI index inclusion candidate! |
| RIO.AX | We wrote extensively in our December quarterly about Airlie's view on stock-picking in the resources sector, with a preference for diversified miners (BHP, RIO) and miners with tier-1 assets like IGO. With portfolio holdings BHP, RIO, BlueScope, Ampol and IGO up >50% this year as the market scrambles for Real Assets, we have pulled back our positions. |
| IGO.AX | We wrote extensively in our December quarterly about Airlie's view on stock-picking in the resources sector, with a preference for diversified miners (BHP, RIO) and miners with tier-1 assets like IGO. With portfolio holdings BHP, RIO, BlueScope, Ampol and IGO up >50% this year as the market scrambles for Real Assets, we have pulled back our positions. |
| ALD.AX | As ever with cyclical businesses, the privileged nature of these assets was not priced into the shares until the commodity prices turned, whether it be refiner margins ripping on the closure of the Strait of Hormuz, US steel spreads rising 50% or copper rallying 30-40% over the year. Positive earnings revisions and the emergence of market narratives like the 'HALO' moniker have left many market participants chasing the shares higher; we like to say we liked Ampol, BlueScope and BHP before they were cool. With portfolio holdings BHP, RIO, BlueScope, Ampol and IGO up >50% this year as the market scrambles for Real Assets, we have pulled back our positions. |
| NWS | We had included the table below in our December quarterly, lamenting the headwind that USD earners in the portfolio (exemplified by our large positions in Resmed, Aristocrat and News Corp) were performing well operationally, yet share prices were falling over CY25. Portfolio holdings such as Car Group, Pinnacle, Orica, News Corp and Resmed have begun to re-rate but remain attractively priced and offer strong EPS growth. |
| CAR.AX | Portfolio holdings such as Car Group, Pinnacle, Orica, News Corp and Resmed have begun to re-rate but remain attractively priced and offer strong EPS growth. |
| PNI.AX | Portfolio holdings such as Car Group, Pinnacle, Orica, News Corp and Resmed have begun to re-rate but remain attractively priced and offer strong EPS growth. |
| ORI.AX | Portfolio holdings such as Car Group, Pinnacle, Orica, News Corp and Resmed have begun to re-rate but remain attractively priced and offer strong EPS growth. |
| MQG.AX | We have talked ad nauseam about our view that the Big Four Australian Banks were overvalued vis-à-vis both the cyclical outlook (rising rates to slow credit growth) and the structural outlook (aggressive newish entrant Macquarie looking to become the Big Fifth bank via sharp deposit pricing). |
| 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 | |||
