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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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Buyside Digest is not affiliated with, and does not endorse, Airlie Small Companies Fund. This analysis is provided for institutional research purposes only and is not investment advice.
"Airlie Small Companies outperformed in Q2 2026 but lagged for the full year due to systematic avoidance of small cap resources, which posted historic gains but exhibit poor long-term fundamentals. The concentrated portfolio focuses on quality Australian small industrials with competitive advantages purchased at steep discounts."
The Airlie Small Companies Fund returned 6.7% in Q2 2026 versus the benchmark's 3.3%, driven by strong performance from Guzman y Gomez, Dicker Data, and Data#3. For the full FY26, the Fund returned -6.0% versus the benchmark's 8.1%, with underperformance primarily attributable to the Fund's systematic avoidance of small cap resources, which returned 30.8% and drove the entire Small Ords Index return. The manager maintains conviction in this approach, noting that small cap resources have generated only 6% average ROE over 25 years with negative cumulative free cash flow. Stock-specific detractors included Gentrack, down 73% on product development issues, and EBOS, down 52% on contract losses and cost pressures. The Fund's performance relative to the Small Industrials Index has been solid since inception. The portfolio remains concentrated in quality businesses with competitive advantages, including distribution oligopolies like Dicker Data and founder-led companies like Guzman y Gomez, many trading at material discounts to intrinsic value. The manager remains optimistic about prospects given the rich opportunity set in mispriced small cap industrials.
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