When Regimes Shift, So Should Portfolios

East Coast Capital Management

September 2025

Funds operated by this manager:

ECCM Systematic Trend Fund

Equities can continue grinding higher

if these risks remain contained

Pendal

September 2025

5 minutes read time

Historically high valuations don't mean markets cannot keep going up. Crispin Murray explains what's driving markets - and the risks to watch for

EQUITY markets are trading at historical highs - but can continue grinding higher if key risks facing the US economy remain contained, says Pendal's head of equities Crispin Murray in a new webinar.

In the US, the S&P 500 is trading at about 23 times earnings, while the NASDAQ is around 28 times.

"That's right at the high end of those historic ranges," says Murray in his latest Beyond The Numbers bi-annual ASX outlook.

"It means markets are vulnerable if there is a dramatic change - whether it's earnings or the economy."

That said, valuations are not uniform across the market.

Excluding the five-biggest names reduces the S&P 500's PE to about 21 times - still high, but not extreme - while an equal�'weighted S&P 500 sits closer to 17 times, near historical averages, says Murray.

"That's telling you that a large part of this US market is not excessively valued, and it's very much a concentration in those tech-related names."

Meanwhile Australian shares powered 11 per cent higher over the six months to September, despite dipping into correction territory during that period as growth and liquidity outweighed policy uncertainty.

(Scroll down for Crispin's take on ASX reporting season.)

"It's certainly been a roller coaster ... that just highlights how the market is not particularly efficient in pricing," says Murray.

"At Pendal, we believe you make money by anticipating change and taking advantage of a market that has become very focused on the short term."

The risks to watch

Risks to the current market rating include:

• The looming threat of stagflation driven by policy headwinds

• Market concerns about US fiscal sustainability

• A risk that the AI boom fades

• Any potential removal of liquidity if retail flows slow or corporations reduce stock buy-backs

US government policy is at the core of the challenges.

Lower immigration is curbing population growth - a key driver of GDP - while tariffs are feeding through to prices, with roughly 40 per cent of their impact already visible in consumer prices, says Murray.

Meanwhile, monetary policy remains very tight.

"What that means is the outlook for the economy is quite different today than where it was at the beginning of this year.

"Looking into the fourth quarter, US growth is set to be below 1 per cent, inflation heading towards 4 per cent.

"It does look a lot like stagflation - and clearly, if we did have that tipping point in the economy, earnings go down, and the market won't sustain its current multiple."

Positive drivers remain in place

Still, that scenario appears unlikely.

"Corporate profitability continues to be good," points out Murray.

"This is important, because it means companies still have the ability to invest, and it also means that they're less likely to undertake substantial job-cutting programs.

"There's been enormous growth in the data centre and the power area of the economy - and that is helping prop up growth.

"Consumers have seen their net worth rising dramatically over the last few years, and that's estimated to support growth by between half and 1 per cent.

"And the final issue, which I think is probably the most important for now, is that the policy environment - which has been negative - is turning more constructive for growth.

"Five rate cuts are priced into the market, fiscal stimulus from the budget Bill next year is estimated to be close to 1 per cent positive, and clearly the US has been set up to the electoral cycle and ensuring the economy is in good shape ahead of the mid-terms.

"So, we don't think we do cross that tipping point, but it's clearly a major risk."

Lessons from ASX reporting season

In Australia, several themes stood out in the recent full-year ASX earnings season, including high levels of post-result volatility.

Somewhat unusually, the best-performing sectors during reporting season were not correlated to earnings.

Resources stocks were buoyed by optimism around China, while gold stocks lifted on concerns about government financing and central bank buying.

On the negative side, earnings were a driver of underperformance - led by building materials and steel where ASX companies with exposure to the US suffered weakening demand.

"Overall, earnings revisions weren't that exciting but when you dig down into it, most of the negatives were quite stock specific.

"It was companies that were not necessarily executing as well as they should [or] those exposed to the US.

"Outside of those names, though, most companies were either reasonably comfortable with the outlook or actually quite positive.

"So generally speaking, I think the outlook for earnings is stable to slightly positive as a result of what we saw in that earnings season.

"We still get mid-single-digit earnings growth, which means returns aren't exciting in Australia, but we still get a reasonable outcome."

Data centres a good way to play AI

One question on investors' minds is the prospect of the AI boom continuing.

"There is scepticism that the money being spent is not generating a return - and it's something we're watching carefully," Murray says.

"But one thing I'll emphasise is that the spend is real - and the people who are investing have the money.

"These hyper scalers - Amazon, Google, Microsoft, Meta and Oracle - have the financing to spend this money, and they believe they are getting a return.

"Consumers are also increasingly using these products."

Murray says the world has a shortage of "compute" - an industry term for the processing power, memory and storage needed to perform calculations and run applications - and this is an opportunity for Australia and particularly local data centres.

"One of the challenges with investing and building data centres in Australia is access to land, access to capability, getting planning approval and getting power access.

"These things mean that there is a structural under-supply of capacity in Australia, and the companies that can deliver it are very well positioned.

"We still believe the market underestimates the confluence of not just AI demand, but the requirement for companies to move to the cloud to enable themselves to take part in utilising AI to run their businesses better."

Funds operated by this manager:

Pendal MicroCap Opportunities Fund , Pendal Global Select Fund - Class R , 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 Sustainable Balanced Fund - Class R , Pendal Multi-Asset Target Return 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

Turning turbulence into triumph: 5 themes reshaping

the investment landscape

Alphinity Investment Management 

September 2025

3 minutes read time

There are five powerful themes reshaping the investment landscape and driving corporate performance, creating winners and losers across global markets.

The AI revolution stands as the defining narrative across global markets, driving fundamental shifts in capital allocation and valuation frameworks. But there are far more factors shaping the current investing landscape.

Lower interest rate expectations and regulatory reform have reignited investor confidence, while US President Donald Trump's tariff agenda has injected supply chain uncertainty and continues to impact both corporate margins and consumer spending power. Meanwhile, geopolitical tensions are fuelling unprecedented defence spending and strategic consolidation as companies position for an increasingly fragmented world.

These converging forces created a tale of two markets during the recent 2Q25 US earnings season.

On the surface, the numbers appeared robust: over 80 per cent of US companies beat earnings expectations, guidance upgrades accelerated to double the 1Q25 rate, and consensus pushed earnings growth forecasts to an impressive 11 per cent and 13 per cent for 2025 and 2026, respectively. Yet beneath this veneer of strength lay a more complex reality. Earnings growth concentrated heavily within just three sectors and performance diverged sharply among industry peers.

US 2Q25 Reporting Season - Strong overall growth of 12%, but largely driven by 3 sectors

This polarised landscape has created an unforgiving environment where companies skilfully navigating these themes are thriving, while those stumbling face harsh consequences.

Five themes defining corporate performance

We see these five powerful themes reshaping the investment landscape and these only further evolved and intensified through the latest US earnings cycle:

1. AI from speculation to implementation. While the mentions of AI remain near historic highs, business language has evolved from speculative possibilities to concrete implementation. Management teams are increasingly providing specific use cases rather than broad theoretical benefits, though most companies acknowledge they remain in the early stages of realising meaningful productivity gains.

2. Defence spending accelerates. Global defence expenditure has surged amid a pronounced strategic pivot towards deterrence capabilities and military modernisation. NATO member commitments are escalating from 2 per cent to a targeted 3.5-5 per cent of gross domestic product by 2030, exemplified by Germany's €500 billion defence infrastructure fund. Global defence spending is projected to expand at 9 per cent annually from a $2.5 trillion baseline.

3. Adapting to the tariff reality. The shift from uncertainty to operational reality has prompted comprehensive corporate responses across multiple fronts. Three-quarters of affected companies are actively restructuring supply chains and renegotiating supplier agreements, while over half are implementing customer price pass-throughs. Strategic import frontloading ahead of tariffs has complicated near-term financial interpretations.

4. Strategic M&A consolidation. Acquisition activity has intensified with a pronounced focus on strategic technology capabilities rather than traditional scale benefits. Well-capitalised companies with proven execution are pursuing disciplined transactions targeting AI competencies, industrial consolidation opportunities, and infrastructure enhancement despite broader economic uncertainties.

5. Consumers not out the woods yet. Despite some recovery from the prior quarter's sharp deterioration, consumer sentiment remains fragile with management guidance pointing to a challenging second-half outlook. Real consumer spending growth is projected at just 1 per cent annualised through H2 2025, driven by softer employment growth, tariff-induced inflation, and scheduled transfer payment reductions. This environment favours companies with defensive, non-discretionary revenue streams as price-sensitive consumers prioritise essential spending.

Navigating complexity

Today's investment landscape rewards execution excellence while punishing missteps, as these five forces - AI implementation, defence modernisation, tariff adaptation, strategic M&A, and consumer resilience - create clear winners and losers even within sectors.

Success requires identifying companies that transform these forces into competitive advantages. As earnings dispersion widens and market patience diminishes, broad sector exposure is insufficient.

Investors must focus on best-in-class operators with proven execution capabilities and structural competitive advantages that benefit from, rather than merely endure, the forces reshaping the global economy.

Funds operated by this manager:

Alphinity Australian Share Fund , Alphinity Concentrated Australian Share Fund , Alphinity Sustainable Share Fund , Alphinity Global Equity Fund , Alphinity Global Sustainable Equity Fund

This material has been prepared by Alphinity Investment Management ABN 12 140 833 709 AFSL 356 895 (Alphinity). It is general information only and is not intended to provide you with financial advice or take into account your objectives, financial situation or needs. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. Any projections are based on assumptions which we believe are reasonable but are subject to change and should not be relied upon. Past performance is not a reliable indicator of future performance. Neither any particular rate of return nor capital invested are guaranteed.

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

Simon explains ECCM's fully systematic, data-driven trend-following approach across 80+ highly liquid global futures, designed to sidestep human bias and add low-correlated diversification to Australia-heavy portfolios. She highlights real-world examples from gold to feeder cattle, shares a strong multi-year track record, and contrasts liquid alternatives with illiquid private markets-making the case for a meaningful allocation to trend following.

Funds operated by this manager: ECCM Systematic Trend Fund

Why the Gold Price Keeps Rising

Marcus Today

August 2025

Why does the gold price go up? Let me tell you the main reason the gold price goes up.

All the gold dug up in the world is a lump of metal: 20.4m by 20.4m by 20.4m. That's all the gold ever dug up in the world. It grows about 2% per annum with production, and it shrinks about 2% per annum with consumption in things like electronics.

So you've got this inert lump of metal, 20.4m square, sitting there -- earning nothing, doing nothing, looking pretty if it can -- and a whole load of people are running around it deciding what the price is.

In the last couple of decades, two things have happened. One is exchange traded funds came along and bought. If it bought three metres by three metres by three metres, it completely changed the supply dynamics of this inert piece of metal.

It's an amazing thought that if you could create an exchange traded fund backed by physical gold and start selling it, then as you sell you've got to find the gold. So you go into this inert, stable 20.4m cube and start buying chunks of it so that people invest in gold. It was self-fulfilling really. When exchange traded funds started in 2003, people started buying gold as an investment.

It shoved demand up. Consequently, the gold price went from between $200 and $500 an ounce to $3,500. Now it's 20 years later and it's still going on. Exchange traded funds are buying gold, and when gold has a run it's a squeezy commodity to get hold of. That is backed by physical gold. So gold is being squeezed -- and squeezed again.

Add on top of that currency. If you've got an inert piece of metal and everyone's running around it wondering what price it should be, and it's priced in US dollars, then because of a global financial crisis you print twice as many US dollars, the US dollar is worth half as much.

For one thing it was the GFC, then Covid for another. Print twice as many US dollars and the currency is worth half as much. So the price of gold, and anything else priced in US dollars, doubles -- not because gold is worth any more, but because the currency is worth less. That's what's driven the gold price as well.

One of the biggest drivers for the gold price is when the US dollar goes down. You'll find the gold price goes up.

At the moment the US has a lot of debt. That weakens the currency. A currency is really a reflection of how strong an economy is. If they put tariffs in and it slows the US economy down, the US dollar goes down. If they start to cut interest rates, which it looks like they're going to, the currency goes down because it doesn't yield as much.

All this is pushing towards a weaker US dollar. And a weaker US dollar is going to cause the gold price to go up again.

So combined with the risk of "The Big One", a falling US dollar, exchange traded fund buying -- the gold price goes up. And that's what's going on at the moment.

DISCLAIMER: This content is for general information purposes only and does not constitute personal financial advice. Please consider your own circumstances or seek professional advice before making investment decisions.

Funds operated by this manager:

Marcus Today Equity Income SMA , Marcus Today Growth SMA

Australian Equities Reporting Season Update September 2025

Airlie Funds Management

September 2025

Deputy Portfolio Manager Joe Wright and Portfolio Manager Will Granger provide an update of the recent reporting season.

Joe and Will unpack the headline results but also explore the underlying themes that emerged across sectors. They share their perspectives on how companies have navigated a challenging economic environment, highlighting where management teams have delivered strong operational performance and where headwinds remain.

Funds operated by this manager:

Airlie Australian Share Fund , Airlie Small Companies Fund

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 Airlie Funds Management ('Airlie') 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 an Airlie financial product or service may be obtained by calling +61 2 9235 4760 or by visiting www.airliefundsmanagement.com.au.

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 an Airlie 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. Airlie makes no guarantee that such information is accurate, complete or timely and does not provide any warranties 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 Airlie. 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. Airlie 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 Airlie claims no ownership in, nor any affiliation with, such trademarks.   Any third party trademarks that appear in this material are used for information purposes and only to identify the company names or brands of their respective owners. No affiliation, sponsorship or endorsement should be inferred from the use of these trademarks.  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 Airlie.

Chris Gosselin, CEO of FundMonitors.com, speaks with Benjamin Harrison, Chief Investment Officer at Altor Capital. 

In this conversation, Ben shares how the Altor AltFi Income Fund has delivered consistent performance over seven years, combining private credit investments with unique equity kickers. He also discusses their hands-on approach, focus on mid-market corporates, and where he sees the greatest opportunities for growth-making this a valuable watch for investors interested in private credit.

Chris Gosselin, CEO of FundMonitors.com, speaks with David Franklyn, Managing Director and Co-Head of Funds Management at Argonaut.

David outlines the Argonaut Natural Resources Fund, launched in 2020, which has delivered strong returns by investing across mining companies from majors like BHP to small-cap explorers. He highlights the fund's focus on themes such as energy transition and geopolitical risk, with gold as a safe haven and copper as the key growth driver, while noting that resources remain undervalued but vital to global growth.

Funds operated by this manager: Argonaut Natural Resources Fund , Argonaut Global Gold Fund

Chris Gosselin, CEO of FundMonitors.com, speaks with Clint Maddock, Director and Co-Founder at Digital Asset Funds Management, about the firm's Digital Income Fund and its market-neutral arbitrage strategy in the cryptocurrency space.

Clint explains how the fund has delivered consistent double-digit annual returns with minimal drawdowns, and why growing mainstream adoption of digital assets continues to create opportunities.

Funds operated by this manager:   DAFM Digital Income Fund (Bitcoin Index Class) , DAFM Digital Income Fund (Digital Income Class)

Expert Analysis of the RBA's August 12 Rate Decision

FundMonitors.com

August 2025

Chris Gosselin, CEO of FundMonitors.com, speaks with Nicholas Chaplin, Director and Portfolio Manager at Seed Funds Management, and Renny Ellis, Director & Head of Portfolio Management at Arculus Funds Management, following the Reserve Bank of Australia's surprise 25 basis point rate cut.

The panel debates whether the decision was justified or politically driven, explores its implications for inflation, the property market, and investors, and examines the potential for further rate cuts. They also discuss global influences, including U.S. tariffs and their impact on inflation and markets.

Webinar Recording | How to get the most from Fundmonitors

FundMonitors.com

04 August 2025

To help you get a better understanding of the www.fundmonitors.com database, watch this webinar recording to help you learn to navigate the database and get the most out of its powerful fund analytics. 

The webinar covered the following:

• Accessing the site
• Selecting and comparing funds
• Peer group analysis
• Building and managing a watchlist
• Creating a portfolio
• FACTORS Research

If you like to see just 1 aspect of the webinar feel free to jump to the relevant timestamp:

Expert analysis on what the RBA will do next Tuesday, August 12

FundMonitors.com

August 2025

Chris Gosselin, CEO of FundMonitors.com, speaks with Nicholas Chaplin, Director and Portfolio Manager at Seed Funds Management, and Renny Ellis, Director & Head of Portfolio Management at Arculus Funds Management, ahead of the RBA's August board meeting. Both accurately predicted July's decision to hold rates and weigh in on whether a cut is likely this time. They discuss key economic indicators--including unemployment, inflation, fiscal stimulus, and consumer sentiment--arguing that while conditions justify holding steady, political pressure may force the RBA's hand.

The conversation also touches on global influences, particularly rising inflation risks in the US driven by tariffs and currency movements. Both managers share their outlook for the remainder of the year, expecting at most one further rate cut, and outline how they're positioning portfolios amid uncertainty in rates, credit markets, and global economic trends.

Webinar Recording | How to get the most from Fundmonitors

FundMonitors.com

28 July 2025

To help you get a better understanding of the www.fundmonitors.com database, watch this webinar recording to help you learn to navigate the database and get the most out of its powerful fund analytics. 

The webinar covered the following:

• Accessing the site
• Selecting and comparing funds
• Peer group analysis
• Building and managing a watchlist
• Creating a portfolio
• FACTORS Research