Australian Secure Capital Fund - Property Update

Australian Secure Capital Fund

September 2026

The Australian property value decline continued in August with a -0.9% monthly fall. This is the fifth consecutive monthly decline, with values now falling 3.6% below the market peak recorded in March.

Sydney (-1.4%) and Melbourne (-1.1%) are still setting the pace in this regard, posting their seventh consecutive monthly declines.

However, the mid-sized capitals have all joined the slide now too, with Brisbane (-1.0%), Adelaide (-0.8%), Perth (-0.8%), Canberra (-1.1%), and Hobart (-0.2%) all posting monthly declines. Darwin (+0.6%) was the lone outlier that posted a monthly increase in values in August.

Largely, this is a reflection of declining buyer demand, with Cotality's quarterly home sales estimate tracking 15.5% lower than at the same time last year. Similarly, capital city listings were 24% higher than a year ago in the four weeks to August 30.

Funds operated by this manager:

ASCF Select Income Fund , ASCF High Yield Fund , ASCF Premium Capital Fund , ASCF Private Fund (Wholesale)

What the AI slowdown means for chip stocks

Marcus Today

September 2026

5-minute read

Why do the AI labs suddenly want to slow down?

Reason one: it comes down to money

Cloud compute is the biggest expense AI labs carry, so slowing the progress of frontier training lowers cost ahead of IPOs. The second-order effect is a price war. Spending less on training gives room to cut prices and buy market share with it. OpenAI already cut prices across its GPT-5.6 family in July and August. Anthropic is yet to do the same.

Regulation helps them twice over. The more of it there is, the harder it gets for anyone else to compete with the leaders. This is the purest commercial reason for AI companies to slow progress, and would mean "safety" is being used as an excuse. Aidan Gomez at Cohere said it plainly - "a mechanism that slows everyone down while preserving existing commercial advantage does not make AI safer".

Reason two: something happened behind the scenes

Amodei's essay names a swarm of OpenAI agents that went undetected while collaborating to breach Hugging Face in July, alongside AI's growing ability to improve itself, as the key reasons to slow down progress. We, the public, see a fraction of what these models can already do, and the full damage from the spring and summer hacking sprees is still not known.

A former Anthropic researcher quit last week saying the people building this "earnestly believe that it could kill us all by the end of the decade", and Anthropic's own alignment lead puts extinction inside ten years at better than 10%. Whatever it was, the odds are it was stopped at the last minute.

While more doomsday, this narrative does line up with some of the videos which sparked fear last year surrounding humanity not being ready for superintelligence, and that soon AI will go rogue and get caught. 

Reason three: the IPO timing problem

The loosest reason, but still worth mentioning briefly - Altman has agreed with Amodei, using safety as an excuse to delay OpenAI's float. The simple read is that the market cannot absorb SpaceX, Anthropic and OpenAI inside 12 months, and SpaceX is about to take a larger Nasdaq 100 weighting that triggers billions of passive buying on its own.

Why the pause won't hold

China called it "fearmongering", its cyberspace regulator published a framework of its own, and DeepSeek and Z.AI are both raising fresh money to go faster. Justin Lin, one of the architects of Alibaba's (NYSE: BABA) Qwen, put it better than anyone - "When we try to accelerate, u tell me to slow down?" There is no participant list, no verification and nothing to enforce.

The essay also asks for tighter chip controls on China and a crackdown on distillation (China copying the US). Microsoft (NASDAQ: MSFT) published a 15,000-word code of conduct of its own on Monday that comes down to five words: people matter more than AI, and says nothing whatsoever about spending less. $145bn of CapEx for the year. Limits on the model, not on the build.

The genie is out of the bottle in our opinion. If the US slows, China will keep going, forcing the US to resume. If both stop, someone else will start.

What it means for semiconductor investors

The key question for us and our investment decisions is whether this is more reason to avoid the Global X Semiconductor ETF (ASX: SEMI), or a DeepSeek-like buying opportunity. The chip selling looks more sentiment-based than fundamental in our opinion. Training is the shrinking share of compute and inference is the growing one, so capping capability does not cap usage, and a price war between the labs means more of it rather than less. That is the whole logic of Nvidia (NASDAQ: NVDA) buying Hugging Face for $12.9bn.

Amodei said outright that pacing will not necessarily mean reduced spending or growth. Where it does bite is timing, and timing is not Nvidia's problem. The successor to GPT-6 Astra needs a cluster four times the size of the 100,000-GPU Texas complex, and that next generation of clusters is what the picks-and-shovels names are priced on. Nvidia sells chips for training and inference, so slower training is partly covered by more usage.

Those involved in the infrastructure side of the AI buildout are the real losers, and were hammered on Monday - Corning (NYSE: GLW) down 13.7%, Hewlett Packard Enterprise (NYSE: HPE) 10.8%, Celestica (NYSE: CLS) 8.8%, Vertiv (NYSE: VRT) 7.6%, and Arista (NYSE: ANET) down 5.9%. Corning sells the fibre that wires a data centre, Vertiv the cooling, Celestica the racks.

The fundamentals of SEMI remain strong in our opinion, but sentiment has taken another hit. Another reason to stay in cash given the current macro backdrop, but our irresistible buying opportunity is slowly taking shape.

Funds operated by this manager:

Marcus Today Equity Income SMA , Marcus Today Growth SMA

Takeover activity is picking up for ASX small caps

Pendal

September 2026

(2-minute read)

AFTER several years in which small caps have lagged their larger peers, valuation gaps have become hard to ignore -- and strategic buyers and private equity appear increasingly willing to act.

Lewis Edgley, co-portfolio manager of Pendal's MicroCap Opportunities and Smaller Companies funds, says the recent pickup has been striking.

"We observed around 15 small cap bids or approaches in the eight weeks to the end of August," he says. "This was a huge pickup compared to this level of M&A activity we've seen in the preceding year."

The activity has been broad but not evenly spread.

Edgley notes that 10 of the 15 approaches were for industrial companies, the remainder were in resources.

That split reflects where buyers are finding value: in quality industrial businesses that have been de-rated, and in resource names benefitting from stronger commodity momentum.

Where bidders see hidden value

Among the industrial names attracting interest, FleetPartners has been one of the clearest examples, according to Edgley.

The fleet leasing business received an initial proposal at $3.60 a share, representing a 27 per cent premium to its last traded price, before the situation developed into what Edgley describes as "a four-party bidding war with subsequent bids as high as $4".

While the stock is trading around $4.20, above the initial bids, he says the small caps team sees meaningful further upside from here.

"Our view of value sits in excess of the current share price, but the ultimate price will be a function of where the current bidders see value. We expect this to become evident in coming weeks."

Other companies that have caught buyer interest include Peet, which received a cash-and-scrip proposal from Ingenia; Austal, where an offer for its US business highlighted significant value in the remaining Australian operations; and SkyCity, which disclosed approaches it considered too low and opportunistic.

Edgley also points to AUB Group and Iress as businesses where potential M&A optionality remains, while stressing that the investment case for both does not rely on a takeover.

"We think that M&A is not over, there'll be continued activity," he says.

"When we look at our own fund, we think about where we are likely to see bids come from. We think both Iress and AUB Group for us are obvious candidates for future M&A."

Both businesses have been approached previously, but a takeover didn't progress for one reason or another.

However, Edgley says the potential for another takeover approach is strong given the strategic nature of the assets as well as a "significant amount of valuation upside".  

"AUB is now the sole listed insurance broking business on the ASX. There were three, but over the last two years Steadfast and PSC Insurance have been taken out.

"It is important to note, our thesis on both AUB and Iress does not rely on M&A and a takeover - we just see this as upside optionality"

Why small caps look ripe for re-rating

The backdrop is a market where small caps have materially underperformed large caps.

"We've seen small caps underperform significantly for the last couple of years versus large caps," Edgley says. "The valuation divergence has become even more significant."

He adds that small caps are trading close to one standard deviation cheap relative to their long-term average, and a full standard deviation below large caps on a relative basis.

"When there is mispricing of stocks in public markets, eventually there's always another buyer out there that will look to take advantage of that," Edgley says.

Funds operated by this manager:

Pendal MicroCap Opportunities Fund , Pendal Sustainable Australian Fixed Interest Fund - Class R , Pendal Focus Australian Share Fund , Pendal Horizon Sustainable Australian Share Fund , Regnan Credit Impact Trust Fund , Pendal Sustainable Australian Share Fund , Pendal Multi-Asset Target Return Fund , Barrow Hanley Concentrated Global Share Fund , Pendal Active Balanced Fund , Pendal Active Conservative Fund , Pendal Australian Equity Fund , Pendal Australian Long/Short Fund , Pendal Australian Share Fund , Pendal Dynamic Income Fund - Class R , Pendal Fixed Interest Fund , Pendal Global Emerging Markets Opportunities Fund - Wholesale Class , Pendal Global Property Securities Fund , Pendal Government Bond Fund , Pendal Imputation Fund , Pendal MidCap Fund , Pendal Monthly Income Plus Fund , Pendal Property Investment Fund , Pendal Short Term Income Securities Fund , Pendal Smaller Companies Fund

This information has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and is current as at December 8, 2021. PFSL is the responsible entity and issuer of units in the Pendal Multi-Asset Target Return Fund (Fund) ARSN: 623 987 968. A product disclosure statement (PDS) is available for the Fund and can be obtained by calling 1300 346 821 or visiting www.pendalgroup.com. The Target Market Determination (TMD) for the Fund is available at www.pendalgroup.com/ddo. You should obtain and consider the PDS and the TMD before deciding whether to acquire, continue to hold or dispose of units in the Fund. An investment in the Fund or any of the funds referred to in this web page is subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested. This information is for general purposes only, should not be considered as a comprehensive statement on any matter and should not be relied upon as such. It has been prepared without taking into account any recipient's personal objectives, financial situation or needs. Because of this, recipients should, before acting on this information, consider its appropriateness having regard to their individual objectives, financial situation and needs. This information is not to be regarded as a securities recommendation. The information may contain material provided by third parties, is given in good faith and has been derived from sources believed to be accurate as at its issue date. While such material is published with necessary permission, and while all reasonable care has been taken to ensure that the information is complete and correct, to the maximum extent permitted by law neither PFSL nor any company in the Pendal group accepts any responsibility or liability for the accuracy or completeness of this information. Performance figures are calculated in accordance with the Financial Services Council (FSC) standards. Performance data (post-fee) assumes reinvestment of distributions and is calculated using exit prices, net of management costs. Performance data (pre-fee) is calculated by adding back management costs to the post-fee performance. Past performance is not a reliable indicator of future performance. Any projections are predictive only and should not be relied upon when making an investment decision or recommendation. Whilst we have used every effort to ensure that the assumptions on which the projections are based are reasonable, the projections may be based on incorrect assumptions or may not take into account known or unknown risks and uncertainties. The actual results may differ materially from these projections. For more information, please call Customer Relations on 1300 346 821 8am to 6pm (Sydney time) or visit our website www.pendalgroup.com

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What the headlines are missing on private credit

Magellan Investment Partners

August 2026

(Viewing time: 30 mins)

Asset-backed credit is a well-established part of Australia's lending market, but it operates quite differently from corporate and real estate private credit that has attracted much of the recent attention.

In this episode of In The Know, Simon Brinsmead from Barrenjoey is joined by Eric Williamson, Head of Private Credit Investments and Eva Zileli, Senior Fund Manager, Credit, from Barrenjoey Private Capital.

They explain how asset-backed lending works, the residential mortgages and other financial assets underpinning these investments, and the layers of protection built into securitisation structures. They also examine Australia's non-bank lending sector, how they assess credit quality and risk, and the role asset-backed credit can play within a diversified portfolio.

Funds operated by this manager:

Vinva Global Alpha Fund - Active ETF (ASX: V1AC) , Vinva Australian Equity Fund , Vinva Global Equity Fund , Vinva Australian Alpha Extension Fund , Vinva Global Alpha Extension Fund - Class A , Magellan Infrastructure Fund , Magellan Global Opportunities Fund No.2 , Magellan Infrastructure Fund (Unhedged) , Magellan Core Infrastructure Fund , Magellan Global Opportunities Fund Active ETF (ASX:OPPT)

Important Information: This material has been delivered to you by Magellan Asset Management Limited ABN 31 120 593 946 AFS Licence No. 304 301 trading as Magellan Investment Partners ('Magellan Investment Partners') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation.  This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should obtain and consider the relevant Product Disclosure Statement ('PDS') and Target Market Determination ('TMD') and consider obtaining professional investment advice tailored to your specific circumstances before making a decision about whether to acquire, or continue to hold, the relevant financial product. A copy of the relevant PDS and TMD relating to a Magellan Investment Partners financial product may be obtained by calling +61 2 9235 4888 or by visiting www.magellaninvestmentpartners.com

Past performance is not necessarily indicative of future results and no person guarantees the future performance of any financial product or service, the amount or timing of any return from it, that asset allocations will be met, that it will be able to implement its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of a Magellan Investment Partners financial product or service may differ materially from those reflected or contemplated in such forward-looking statements.

This material may include data, research and other information from third party sources. No guarantee is made that such information is accurate, complete or timely and no warranty is given regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material.  Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Magellan Investment Partners or the third party responsible for making those statements (as relevant). Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in this material. Magellan Investment Partners will not be responsible or liable for any losses arising from your use or reliance upon any part of the information contained in this material.

Any third-party trademarks contained herein are the property of their respective owners and Magellan Investment Partners claims no ownership in, nor any affiliation with, such trademarks.   Any third-party trademarks contained herein are the property of their respective owners, are used for information purposes and only to identify the company names or brands of their respective owners, and no affiliation, sponsorship or endorsement should be inferred from such use. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Magellan Investment Partners. (080825-#W17)

Chris Gosselin, CEO of FundMonitors.com, speaks with Dean Fergie, Director & Portfolio Manager at Cyan Investment Management. They discuss renewed momentum in Australian small caps, key themes emerging from reporting season, and where investors are finding attractive growth opportunities across the sector.

Expert Analysis of  Australia's July CPI Result

FundMonitors.com

August 2026

Chris Gosselin, CEO of FundMonitors.com, speaks with Nicholas Chaplin, Director and Portfolio Manager at Seed Funds Management.

They discuss the latest CPI result, persistent inflation pressures, and why Chaplin believes the RBA may need to take more decisive action on interest rates. The conversation also explores unemployment, government spending, and the challenges facing monetary policy.

Chris Gosselin, CEO of FundMonitors.com, speaks with David Hallifax, Head of Australia & NZ Private Wealth Distribution at Coller Capital.

They discuss how private-market secondaries provide liquidity, diversification and access to established private equity and credit assets, as well as how Coller Capital's Australian strategy is structured for private wealth investors.

Chris Gosselin, CEO of Fundmonitors.com, speaks with Jarrad Stuart, MD & Portfolio Manager at Sharpbridge Funds Management.

They discuss Sharpbridge's concentrated global equities strategy, its focus on individual stock selection, risk management, and the combination of quantitative screening and qualitative analysis used to select, size, and exit portfolio positions.

Expert Analysis of the RBA's June 16 Rate Decision

FundMonitors.com

August 2026

Chris Gosselin, CEO of FundMonitors.com, speaks with Nicholas Chaplin, Director and Portfolio Manager at Seed Funds Management.

They discuss the RBA's decision to hold interest rates steady, persistent inflation pressures, the effectiveness of monetary policy, and whether Australia's 2-3% inflation target remains realistic, while also considering government spending, unemployment and the emerging impact of AI on the labour market.

Chris Gosselin, CEO of FundMonitors.com, speaks with Simone Haslinger, Chief Executive Officer at East Coast Capital Management.

They discuss the fund's strong performance, the market trends that drove returns, and how systematic trend following can reduce behavioural bias while providing diversified exposure across global futures markets.

Funds operated by this manager: ECCM Systematic Trend Fund

Chris Gosselin, CEO of FundMonitors.com, spoke with Jonathan Weinstock, Founder and Managing Director at FarmCap.

They discussed FarmCap's private lending to Australian farmers, its conservative farmland-backed approach, and its focus on short-term funding. Jonathan also explained how the fund supported purchases, refinancing and working-capital needs while targeting strong investor returns.

Funds operated by this manager: FarmCap Private Credit Agricultural Mortgage Fund