A Super Strategy

Marcus Today

May 2025

Every time there is a significant market event I have friends ask me the same set of questions. Why is this happening? Is it too late to sell? I don't have any shares, should I care? The more important question is - how could I have avoided this? Better still - think the stock market doesn't affect you? Think again.

Foreword: In my friendship group there are two types of people. 10% are interested in the stock market. Know what an ETF is and buy and sell shares. The other 90% have never traded in their life, think a bear market is where you can buy a bear and don't really understand what I do at Marcus Today. Should that group be interested in the stock market? If they are 30 years old they will on average have $50,000 in their superannuation account. Where is that money invested? In the stock market! The performance of their super and the amount they will retire with are highly dependent on it. This article is focused on them.

PART 1: SHOULD YOU CARE?

Working in the stock market, the only time I get asked for advice from friends is when there's a major correction. The same question always comes up: "Is it too late to sell?". It happened last month (tariff tumble), it happened last year (carry trade three day flush) and would have happened in Covid. When you can see an account with thousands of dollars dropping 5% in a day, this question isn't surprising. The question no one asks (but should): "How could I have avoided this?" Even more important: "What difference would it make to my retirement by asking that question?".

I know most people under 35 struggle to look far ahead enough to care. When half of my friends are wondering how they will be able to afford a house or start a family, you can forgive them for not paying much attention to something that automatically gets taken out of their payslip and can't be touched for another 30 years. The purpose of this article is to say "you 100% should care".

Given the fabulous opportunity my generation has from super - tax benefits, long runway, the eighth wonder of the world (compounding interest), considering we 'missed' the housing market boom, it is worth investigating the full potential of what your balance could be upon retirement. I used to be an engineer, so let's do a few simple calculations and see what difference each % return makes over the course of a work life.

To simplify the formula, I've made the following (conservative) assumptions:

• Starting point is a 30-year-old with a salary of $100,000 and super balance of $50,000.
• Mandatory employer super contributions of 12% ($12,000 each year).
• Salary only increases by 2.5% p.a. This is the wage price index average over the last 10 years. Doesn't therefore account for any promotions over the course of a working life.
• Retirement age of 65 (it will likely be higher in 35 years' time).

The chart below shows the final super balance you can expect after year 35 with an 8% return. Both the S&P 500 total return index and All Ords Accumulation index average 9-11% (over 30Y) but you have management and administration fees to include.

That aside:

• For high single-digit returns, each % change results in a retirement balance difference of ~$800k.

One percent makes a huge impact in other words when your runway is 35 years, and again, this is a conservative estimate.

The good news is even with 8% average return you'll be retiring with ~$3.5 million. You can see why the government has been steadily trying to increase the mandatory super contribution (goes from 11.5% to 12% in July). If every Australian had the above hypothetical work life there would be no need for the pension. Last FY it accounted for 37% of all government spending. Assuming an inflation rate of 2.5% (the average in Australia for the last 10Y), this $3.5 million equates to a present value of $1.45 million. Not bad. Marcus once estimated how much you really need to retire was around $2 million. Time to ask for that promotion!

Sounds OK, BUT. There are two catches. This calculation assumes 100% of your super is invested in either the S&P 500 total return or the All Ords Accumulation index. Something most super companies will call 'high risk' and try talk you out of. The average 'balanced' Australian superannuation account only has 35% invested in international equities and 30% in Australian equities. The rest is private equity, infrastructure, property, fixed interest and (dare I say it) cash. If you're in a balanced super account your return could shrink from ~8% to ~6% ('defensive' drops it to 5%!), and that $1.45 million retirement fund falls to $0.9 million. Probably enough to live on. But not enough for the European holiday, grand-children school fees or kitchen renovation.

In short:

• Have your super in 'balanced'? That will cost you (at minimum) $500k.
• Have 5% in cash? That will cost you $127k.
• Have any exposure to cyclical sectors like resources? That will (probably) cost you $200k (resources are for medium-term trading, not buying and holding for 35 years).

To combat this you need to switch to a 100% equities investment strategy. Check your current provider allows this. If not. Time to move.

The second catch...tax. Cannot be ignored but I'll try keep it simple. All contributions to super (below the $30k pa concessional cap) are taxed at 15%. All realised investment gains are taxed at 15% (I'm not assuming shares will be held for longer than 12 months, so no 50% CGT concessions). All in all, this is far better than paying at your marginal rate but is still significant.

Factoring in these rates, your $0.9 million in a balanced fund drops to just $670k.

PART 2: THE ROCKET

$670k doesn't sound like much, so now we ask - can you do better?

The next chart shows the final super balance you can expect after year 35 for four different returns ranging from 8% to 14%. At 14% the balance jumps from $3.5 million to $15 million or from $1.4 million to $6.2 million in today's terms. At 18% the line would look like a rocket.

Accounting for the tax rates above these are the final balances and net present value for returns ranging from 8% to 14%.

And the difference one percent makes now?

• For low double-digit returns, each % change results in a retirement balance difference of ~$1.1 million.

Why does all this matter? Is 14% possible?

The Marcus Today Strategy Portfolio has returned ~20% since inception in 2018. We can't guarantee future returns will match past returns of course but even taking 12% - your retirement super level will go from $2.3 million to $5.2 million ($2.2 million present value) and that's not even touching on voluntary contributions. All hypothetical of course. No one knows the future but if you had the opportunity to increase your returns why not take it?

CONCLUSION

Three things for you to do:

1. Subscribe to Marcus Today and start following the Strategy Portfolio.
2. Find a superannuation company that gives you more control. Not allowed to tell you which ones but there are a few out there. They allow you to buy and sell ASX-listed ETFs in the same manner as trading with your regular money. They also let you buy Australian shares (usually just ones in the ASX 300). This brings more relevance to our Growth Portfolio. PME anyone? Alternative is a self-managed super fund but that involves a lot of paperwork.
3. Check in with the Strategy Portfolio bullets once a business day. A lot of work? No, they are usually just a 1-2-minute read. You can even sign up for email trade alerts now.

Bonus: If you want to become a better self-guided investor. Read Market Strategy a few times a week. We call it learning by osmosis.

Oliver Matthew - Senior Analyst & Editor

Funds operated by this manager:

Marcus Today Equity Income SMA, Marcus Today Growth SMA

What Trump's trade war means for EM local currency bonds

abrdn

May 2025

Funds operated by this manager:

abrdn Sustainable Asian Opportunities Fund, abrdn Emerging Opportunities Fund, abrdn Global Corporate Bond Fund (Class A), abrdn International Equity Fund, abrdn Multi-Asset Income Fund, abrdn Multi-Asset Real Return Fund, abrdn Sustainable International Equities Fund

10k Words

Equitable Investors

May 2025

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Apparently, Confucius did not say "One Picture is Worth Ten Thousand Words" after all. It was an advertisement in a 1920s trade journal for the use of images in ads on the sides of streetcars...

Private company M&A valuations have converged with those of ASX-listed emerging companies; a structural shift evident in 52-week highs and lows on the ASX sees gains going to a select group, with CBA being one of the few as lacklustre EPS growth is rewarded with P/E multiple expansion and CBA almost singlehandedly holds up MSCI's Australian index. Overall, EPS estimates for Austalian equities have also been lacklustre but, thanks in part to CBA, the Australian P/E is sitting at elevated levels also seen during the COVID-19 epidemic and the dotcom boom. Meanwhile, there was little market conviction in a 50 basis point cut from the RBA in May (which turned out to be the correct positioning with a 25bp cut announced today). IPO markets remain notably weak in 2025. On the tariff front, US price hikes from goods originating in China were quickly evident relative to those originating elsewhere.

EBITDA multiples of unlisted Australian mid-market trades (Nexia MM Index) v. ASX trading multiples

 

Source: Nexia

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No. of Australian M&A mid-market transactions and disclosed EBITDA multiple average value by enterprise value (March quarter 2025)

 

 

Source: Nexia

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S&P/ASX 300 and cumulative 52-week highs - 52-week lows

 

 

Source: SG Hiscock

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Forecast EPS (next 12m) and forward P/E multiple of Commonwealth Bank of Australia (CBA)

 

 

Source: TIKR

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CBA contribution to 12-month return on iShares MSCI Australia (EWA)

 

 

Source: Koyfin

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Australia MSCI forward earnings per share (analysts' average forecasts)

 

 

Source: Yardeni Research

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Australia MSCI forward PE multiple

 

 

Source: Yardeni Research

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Expectations for a 50 basis point cash rate cut by the RBA in May were just 51% prior to the decision

 

 

Source: ASX

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Decline in IPOs year-on-year globally in CY2025-to-date

 

 

Source: WSJ, LSEG

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2025 Australian IPO tracker

 

Source: Smallcaps.com.au

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US consumer price indices by country of origin

 

 

Source: "Tracking the Short-Run Price of US Tariffs," Cavallo et al, May 10, 2025

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US retail price indices in affected and unaffected categories

 

 

Source: "Tracking the Short-Run Price of US Tariffs," Cavallo et al, May 10, 2025

May 2025 Edition

Funds operated by this manager:

Equitable Investors Dragonfly Fund

Disclaimer

Past performance is not a reliable indicator of future performance. Fund returns are quoted net of all fees, expenses and accrued performance fees. Delivery of this report to a recipient should not be relied on as a representation that there has been no change since the preparation date in the affairs or financial condition of the Fund or the Trustee; or that the information contained in this report remains accurate or complete at any time after the preparation date. Equitable Investors Pty Ltd (EI) does not guarantee or make any representation or warranty as to the accuracy or completeness of the information in this report. To the extent permitted by law, EI disclaims all liability that may otherwise arise due to any information in this report being inaccurate or information being omitted. This report does not take into account the particular investment objectives, financial situation and needs of potential investors. Before making a decision to invest in the Fund the recipient should obtain professional advice. This report does not purport to contain all the information that the recipient may require to evaluate a possible investment in the Fund. The recipient should conduct their own independent analysis of the Fund and refer to the current Information Memorandum, which is available from EI.

Webinar Recording:

Impact of Tuesday's RBA Rate Decision on the Market

FundMonitors.com

May 2025

Watch our recent webinar where leading investment professionals discussed the implications of the Reserve Bank of Australia's latest rate decision and its effect on markets.

Our expert panel featured:

• Nick Chaplin, Portfolio Manager, Seed Funds Management - Hybrid Securities, Bonds, and Fixed Interest
• Winston Sammut, Portfolio Manager, Euree Asset Management - Property and Multi-Assets
• Alex Pollak, CIO and Founder, Loftus Peak Global Disruption Fund

Gain timely insights into how key sectors are responding and what this could mean for investors. 

On the Road with Alphinity Global: The Rising Premium on Certainty

Alphinity Investment Management 

May 2025

Over the past several months, our global investment team has embarked on a series of research trips across multiple continents, meeting more than 250 companies in five countries to gain first-hand insights and identify emerging trends. All six team members recently completed another round of visits to the United States ahead of the 1Q25 reporting season. In today's highly volatile environment, this on-the-ground perspective has proven indispensable for staying ahead of rapidly unfolding developments.

Our conversations with management teams spanning Singapore's financial centres and San Francisco's tech corridors to Mumbai's manufacturing hubs and Beijing's policy circles have revealed a striking shift in corporate sentiment. The optimism that characterized the start of the year has been replaced by widespread operational uncertainty, especially since March, as executives navigate unpredictable policy changes and ongoing supply chain disruptions. This environment has prompted many companies to withdraw forward-looking statements, narrow their guidance ranges, or append new disclaimers to their 1Q25 earnings releases considering persistent macroeconomic volatility.

In this note, we outline some of the key themes emerging from our recent travels and discuss how our on-the-ground insights are helping us refine our portfolio-balancing a more defensive stance with selective growth opportunities that have been unjustly discounted.

Asia: A Mixed Picture of Challenges and Opportunities

• China is gradually refocusing on new economy sectors like AI, robotics, batteries, EVs, and consumer support, but consumers remain cautious, adopting a "wait and see" approach to spending despite elevated levels of savings. Value for money and quality now outweigh brand prestige, signalling a decline in traditional brand loyalty. Some signs of stabilisation are emerging, with improvements in mall traffic, top-tier city housing prices, and reduced property inventory, while retail sales and appliance purchases have exceeded initial executive expectations so far in 2025. However, luxury spending is mixed: aspirational luxury is still declining, ultra-luxury is stable, and fashion and leather goods are outperforming jewellery and watches, in line with forecasts for a modest, rebound-dependent year. We recently added Richemont to our portfolio, recognizing its strong performance in hard luxury through iconic brands like Cartier and Van Cleef & Arpels. These brands benefit from significant pricing power, which helps offset potential tariff impacts, and position Richemont to capture further upside if Chinese consumer demand stabilizes or rebounds.

• Singapore's financial sector is showing resilience and a positive outlook, with major banks benefiting from strong wealth management inflows-a clear sign of a flight to quality amid global uncertainty. The prevailing sentiment among corporates is one of cautious optimism, summed up as "overall good for now, but watch out," reflecting both confidence in current conditions and awareness of potential external risks. DBS Bank stands out as a high-quality, blue-chip leader in Singapore's banking sector. It has posted record results, driven by robust growth in wealth management, early adoption of technology and digital innovation, and a strong regional footprint. DBS is well positioned to capture further growth opportunities in higher-growth markets like Indonesia and India and could also benefit from any recovery in China.

• India is emerging as a compelling long term growth story, albeit with inherent risks. While direct investment opportunities in pure-play Indian stocks are currently limited for our investment process, the country's growth potential adds an attractive dimension to high-quality multinationals such as Walmart, L'Oreal, Schneider, Coca Cola, Amazon, and Unilever. India is also a significant beneficiary of global supply chain realignment, as companies diversify manufacturing away from China in response to escalating tariffs and geopolitical uncertainties. Apple, for instance, assembled $22 billion worth of iPhones in India in the year ending March 2025-a 60% increase year-over-year-now representing 20% of global iPhone output, with plans to further expand production for the U.S. market by 2026. We recently added L'Oréal, the global beauty leader, to our portfolio as its valuation has returned to five-year lows, with compelling medium term growth prospects. While India currently represents just 2% of L'Oréal's sales, it's likely to meaningfully increase over the next several years.

Global Financials: From Recovery and Optimism to Stagflation fears and Volatility

Post-election optimism for deregulation and tax cuts initially fuelled a global banking rally at the end of 2024, buoyed by robust deal pipelines and corporate engagement. However, stagflation fears and plunging consumer confidence reversed sentiment by mid-February 2025, freezing corporate activity. Recent 1Q25 results and CEO commentary show limited numerical impact to date, with tariff-driven front-loaded spending creating sporadic activity and heightened volatility boosting trading desks like Morgan Stanley's. On the real estate side, CBRE's result reflected a continued, yet sensitive commercial real estate recovery cycle. The business was buoyed by the strength of its resilient business lines and continued benefit from scarcity within the office sector for capital markets and leasing.

Across the Atlantic, Germany's €1 trillion defence and infrastructure package represent a structural break from decades of austerity. A potential growth tailwind for Eurozone banks, including Spanish lenders like CaixaBank. Spain's economy is already outpacing EU peers with 2.5%+ GDP growth likely, and we expect that CaixaBank will be a key beneficiary given its market-leading positions in mortgages, payroll services, and wealth management--sectors poised to compound gains from digital transformation and demographic tailwinds. That said, the spectre of U.S. tariffs on EU goods looms large, potentially offsetting 20-30% of Germany's stimulus benefits and introducing cross-sector vulnerabilities.

CaixaBank - Leading retail bank exposed to relative strength of the Spanish economy & seeing strong earnings upgrades

US Industrials - in the eye of the tariff storm

The prevailing sentiment among US industrial players in February 2025 closely echoed what we observed during our September 2024 visit. The sector remains on a path toward gradual, measured recovery, rather than a rapid resurgence. Management teams were however cautious, reflecting uncertainties about inflation, tariffs, political instability, and the Chinese economic landscape. While there were some signs of emerging positive momentum, a "low and slow" industrial rebound is more likely. Notably, regions outside the US - particularly Europe and China - may see stronger recoveries, given their steeper prior declines. End markets continue to matter, with aerospace, electric grid and waste operators all remaining relatively positive, while in contrast the environment remains tough for agriculture, transportation and residential housing.

Two key themes stood out: tariffs and a short-cycle manufacturing recovery. Companies are preparing for tariff-related cost increases, with some already passing on surcharges and viewing tariffs as an opportunity to raise prices, which likely drives inflationary pressures. A fragile short-cycle recovery was noted despite scepticism regarding the underlying causes, with inventory buildup ahead of tariffs largely dismissed by management teams.

Amid these conditions, we remain focused on defensive industrial names such as Waste Connections, the third-largest US waste operator, which recently exceeded 1Q25 estimates and reiterated its FY25 guidance, reporting no material impact from recent macro volatility. Whilst our current exposure to US industrials remains aligned with resilient, high-quality industrials underpinned by resilient end markets, the recent market weakness is starting to throw up exciting opportunities at more reasonable valuations.

US Consumer - From reassured to restrained

During our US visit in January 2025, consumer management teams described the business environment as "generally positive" with expectations of faster policy execution under a new Trump administration. Supply chains have already notably shifted away from Chinese reliance since the previous Trump administration and any potential impact of tariffs was expected to be partially absorbed by Chinese manufacturers, maintaining competitive pricing for US retailers.

The mood had shifted somewhat by March 2025, where our conversations with management were more cautious. Companies were generally reluctant to provide any detail on potential tariff impacts given the changing external goalposts and messaging from the government. There were no clear broad-based trends across the consumer aside from a continuation of the low- and high-income divergence, with the unusually cold start to the year also muddying the data. Whilst consumer confidence has since plummeted to 2022 lows, spending has been more resilient, but often more value-driven with consumers seeking the best bang for their buck and being selective about where to splurge or cut back.

In response we have reduced some of our consumer facing holdings, such as Chipotle and Sherwin Williams, but added to Costco given its relatively defensive growth profile underpinned by a loyal membership base. We also added a new position in our Sustainable Fund to Sprouts Farmers' Market, a specialty grocer with a scarce growth profile within the Consumer Staples sector. We believe Sprouts should benefit both from near term consumer preferences for food at home (vs food away from home) and structural tailwinds of attributes-based healthy foods.

Sprouts Farmers Market - Specialty organic grocer with multiple drivers supporting strong earnings growth

AI & Technology: From AI enablers to beneficiaries beyond the Mag 7

There was a striking disconnect during Technology meetings between the upbeat tone from technology management teams and the turbulence sweeping through equity markets. Enthusiasm around AI remains robust as functionality pushes deeper into business models, unlocking both revenue opportunities and operational efficiencies. "Agentic AI" is the next step in AI evolution where autonomous systems are created that can make decisions and executing complex, multi-step tasks with minimal human oversight.

On top of AI technological advancement, there were three key themes emerged from company discussions:

• The impact of tariffs and associated policy responses: Uncertainty around tariffs and trade policy is causing companies to delay investment decisions, risking reduced capital spending until clearer guidance emerge

• The position of China within the global AI race: The recent breakthrough from China AI company DeepSeek, coupled with continued semiconductor advances from Huawei have prompted the US administration to deploy new policy restrictions to stay ahead in the AI race. These responses wash through companies like Nvidia but also more broadly across the semiconductor supply chain.

• The waning leadership of the Mag 7: The dominance of the "Mag 7" tech giants what appeared at times to be unassailable positions area now showing signs of weakening, due to both policy changes and technological shifts that are increasing competition, especially in areas like search.

Reflecting these shifts, we have steadily reduced our exposure to the Mag-7 and taken some profits in other AI capex exposed plays, such as Cadence Design Systems, and Nvidia. The capital has been reallocating towards AI software beneficiaries such as ServiceNow, while also establishing a position in Chinese champion Tencent, where growth is rebounding on the back of a revitalised gaming pipeline, surging advertising on WeChat Video Accounts, and expanding opportunities in fintech and cloud. TSMC and Netflix also remain favoured holding given the relative resilience of the business models.

In conclusion, our extensive global research travels have proven essential in navigating today's rapidly shifting landscape, allowing us to gain direct, actionable insights from management teams grappling with unprecedented uncertainty. As policy volatility and trade tensions reshape corporate strategies and outlooks, the value of certainty has never been higher for leaders making critical decisions. By grounding our portfolio positioning in these first-hand observations, we are better equipped to follow new earnings leadership and remain agile and well-informed as new challenges and opportunities emerge.

Author: Elfreda Jonker - Alphinity Client Portfolio Manager

Funds operated by this manager:

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

Jurassic farce

Redwheel

May 2025

Funds operated by this manager:

Key Information
No investment strategy or risk management technique can guarantee returns or eliminate risks in any market environment. Past performance is not a guide to future results. The prices of investments and income from them may fall as well as rise and an investor's investment is subject to potential loss, in whole or in part. Forecasts and estimates are based upon subjective assumptions about circumstances and events that may not yet have taken place and may never do so. The statements and opinions expressed in this article are those of the author as of the date of publication, and do not necessarily represent the view of Redwheel. This article does not constitute investment advice and the information shown is for illustrative purposes only.

The case for small caps: why small companies are set to outperform

Pendal

May 2025

THE prospect of rate cuts over the remainder of 2025 should buoy small cap stocks, says Pendal portfolio manager Lewis Edgley.

Markets are increasingly confident that falling interest rates over the next 12 months will help Australia avoid a prolonged economic downturn, assisted by strong employment and continued immigration.

That kind of macro-economic background has traditionally been positive for small caps, which are more cyclical and growth-oriented than their larger counterparts and hence tend to outperform during periods of monetary easing.

"We know from experience that when rates go down, small caps, as a category, tend to outperform large caps," says Edgley.

"So, if we believe that there's not going to be a recession but there is going to be a rate cutting cycle, then running a small cap fund is going to go from feeling like we've been driving with a hand brake on the last few years to letting the hand brake off and maybe even getting a bit of a wind behind us."

Edgley and fellow portfolio manager Patrick Teodorowski co-manage the Pendal Smaller Companies Fund, an actively managed portfolio investing in companies outside the top 100 in Australia and NZ.

Stock selection matters

Edgley says investors are often turned off small caps due to the poor performance of the benchmark ASX Small Ordinaries Index, which has returned 5.4 per cent a year over the past two decades, well below the S&P ASX 100's 8.8 per cent return.

But the headline performance disguises the fact that the median small cap manager returned 11.15 per cent a year over the same period.

"Small cap investing requires time and resources and the index returns have been lower than large caps," he says.

"But if you do it well, there's a huge opportunity to add value and beat the broader market return, while benefiting from diversification.

"We tell people, focus on earnings, not on macro -- that's where you make money in smalls."

Beware cheap stocks

Edgley says from a valuation perspective, small caps are currently trading in line with their large cap counterparts, despite historically trading at an 8 to 10 per cent premium.

"So, you could say small caps are a bit cheap, and maybe that's a good time to buy."

But he cautions that low valuations can be misleading.

"Don't be allured into buying cheap stocks. Because they're often cheap for a reason. Might be a bad management team, might be a poor industry, might be a poor capital structure.

"We've made money out of cheap stocks in the past, but we've also made money out of buying expensive stocks that get more expensive.

"The key is to focus on earnings - if you get that right, you make money."

Why earnings matter: Breville vs Myer

Edgley says a striking example of the power of focusing on earnings is the long divergence between two household names: Breville and Myer.

In the 1970s, both were regarded as standout businesses. Each offered exposure to the Australian consumer, and both were widely seen as credible, reliable options for discretionary spending.

But over the decades, their fortunes have sharply diverged.

Breville has consistently innovated and delivered on what consumers want, from the 70s cult hit Melitta drip coffee machine to today's fully automated espresso stations. That has delivered sustained earnings growth.

"As an investor 15 years ago, you probably would have thought Myer was the bigger, seemingly more credible, safer business to invest in than Breville," says Edgley.

"But look what happened. Breville has had a five times increase in its earnings per share over this period, whereas Myer's earnings have faced significant challenges, down almost 90%."

However, Edgley notes that Myer is currently embarking on a "self-help" journey, which presents a potential opportunity for improvement.

"While Myer has had a tough history, we see a scenario where they could materially improve their earnings through a number of cost and productivity-related improvements that aren't necessarily understood or captured in today's share price," he says.

"This reinforces the point that small caps are all about understanding earnings."

According to Edgley, both Breville and Myer present as interesting investment prospects today.

"Breville continues to have a robust outlook as it innovates and grows into new markets globally while carefully navigating the short-term uncertainties of US tariffs, while Myer has the potential to significantly improve its earnings through strategic internal changes.

"Understanding these dynamics is key to making informed investment decisions in the small cap space."

Author:  Lewis Edgley and Patrick Teodorowski

Funds operated by this manager:

 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

Market Commentary - April

Glenmore Asset Management

May 2025

Funds operated by this manager:

Glenmore Australian Equities Fund