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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"PM Capital's value-driven approach delivered strong Q3 results through exposure to undervalued commodities and European banks. Gold and copper holdings benefited from supply disruptions and record prices while European banks continued re-rating on improving fundamentals."
PM Capital delivered strong performance in Q3 2025 with the Global Companies Fund returning 10% versus 6% for the MSCI World Index. The outperformance was driven by disciplined stock selection and exposure to undervalued cyclical sectors, particularly commodities and European banking. Gold positions benefited from a 17% rise in gold prices to record highs, with Newmont gaining 45% and Northern Star up 26%. Copper holdings including Teck Resources and Grupo Mexico also contributed strongly amid supply disruptions that shifted market expectations from surplus to deficit. European banks continued their re-rating with Caixabank rising 22% on improving fundamentals and shareholder returns. The manager maintains a contrarian approach, investing in quality businesses at bottom-quartile valuations while avoiding overvalued areas. Despite market focus on AI and reshoring themes, the portfolio remains positioned differently from benchmarks in areas offering valuation support. The firm reduced exposure after realising gains in several holdings including Airbus and Spectris.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
High conviction evidenced by concentrated positions in named holdings with specific thesis explanations and sizing decisions. Manager discusses doubling positions in Frontier Digital Ventures, detailed analysis of individual holdings, and willingness to take contrarian positions. Portfolio of 39 total long positions with clear conviction in commodity and banking themes, though some hedging language prevents maximum score.
Growth Outlook
Manager acknowledges supportive market backdrop with equity markets having strong start to FY2026 and closing at all-time highs. However, notes persistent macro headwinds and expresses caution about market narratives lacking valuation discipline. Mixed view with constructive elements balanced by cautionary observations.
Risk Appetite
Portfolio positioned very differently from broader market with reduced invested exposure after exiting several holdings. Manager moved to sidelines on domestic banks while maintaining exposure to undervalued areas. Net invested equities at 85% for Global Fund and 79% for Australian Fund with meaningful cash positions suggest moderate risk appetite.
Capital Deployment
Net capital reduction through exits of Airbus, Spectris, and Mineral Resources while trimming Centuria Industrial REIT. Manager explicitly states reduced invested exposure after realising gains in several holdings. Some new positions like Northern Star but overall trend toward harvesting gains and raising cash.
Forward Guidance
Manager sees significant change creating new opportunities for disciplined investors but emphasizes continued focus on same long-term perspective. Language suggests selective deployment rather than aggressive positioning, with emphasis on discipline and patience.
Language Signal
Balanced mix of opportunity language (attractive, undervalued, scope to move higher) and risk language (cautionary, uncertainty, headwinds). Manager discusses both strong performance and areas of concern without clear directional bias in overall tone.
Perceived Risk
Manager acknowledges persistent macro headwinds, tariff-related uncertainty, and supply chain disruptions. Notes heightened operational uncertainty in corporate commentary and expresses caution about market narratives lacking valuation discipline. Moderate risk awareness without alarm.
Opportunity Density
Manager sees significant change creating new opportunities for disciplined investors and continues to find attractive opportunities in undervalued areas. Selective approach with opportunities in specific sectors like commodities and European banks, though notes portfolio positioned very differently from broader market.
Time Horizon
Manager emphasizes 40-year investment experience and long-term perspective that has guided firm since inception. Investment process often takes years or sometimes a decade to unfold. Recommended investment horizon of seven years plus and focus on sustained performance across multiple cycles indicates long-term approach.
