Performance Report: ASCF High Yield Fund

28 Aug 2025 - FundMonitors.com

The ASCF High Yield Fund rose by +0.67% in July, outperforming the Bloomberg AusBond Composite 0+ Yr benchmark by +0.71% Since inception in March 2017, the fund has returned +8.12% per annum, an outperformance of +6.06% relative to the...

Are you sure about that? The folly of forecasting

28 Aug 2025 - Redwheel

Two recent events have inspired Ian Lance to write (yet again) about the folly of forecasting when it comes to investment. The first was when the Danish healthcare company Novo Nordisk lowered their profit forecast for 2025, and the share...

Performance Report: Insync Global Quality Equity Fund

27 Aug 2025 - FundMonitors.com

The Insync Global Quality Equity Fund has returned +12.60% per annum since inception in October 2009, an outperformance of +0.62% relative to the benchmark which has returned +11.98% on an annualised basis over the same period.

Recognising a stumble from a fall

27 Aug 2025 - Canopy Investors

Quality companies typically trade at premium valuations, but when cyclical headwinds are conflated with secular falls, even the best businesses can be dismissed by the market. When heroes stumble excessive negativity can present...

27 Aug 2025 - Recognising a stumble from a fall

By: Canopy Investors

Recognising a stumble from a fall

Canopy Investors

August 2025

Quality companies typically trade at premium valuations, but when cyclical headwinds are conflated with secular falls, even the best businesses can be dismissed by the market. When heroes stumble excessive negativity can present opportunities to buy quality at a discount.

Quality companies are often not hard to spot. The best are well known and trade at a premium valuation as a result. Despite their appeal, quality companies can be risky investments if the price paid is too high. Yet there are times when investors have the opportunity to buy quality at a discounted price, often when cyclical headwinds are conflated with secular concerns, fuelling negative sentiment and fear that the stock is 'dead money' with limited near-term upside.

Medpace (MEDP)

Take Medpace, for example, an investment in the Canopy Global Small & Mid Cap Fund. This founder-led clinical research organisation focuses on small biotechs and boasts an enviable track record: many years of sales growth exceeding 20%, expanding margins and returns, high cash conversion, and no debt. Its sales represent less than 5% of an addressable market expected to grow 10% pa over the long term. However, from mid-2024 Medpace disclosed lower net new business wins for four consecutive quarters, due to an unexpected increase in trial cancellations by its clients, blamed mostly on a weak funding environment. A litany of additional concerns piled on: potential negative impacts from US drug pricing policy changes, cuts to FDA and NIH funding under the new Secretary of Health and Human Services, and pricing pressure from larger competitors. Despite no fundamental change in the scale of unmet medical need addressed by small biotech, or to Medpace's ability to capture this long-term opportunity, the stock was dismissed by many as 'dead money' with no obvious near-term catalysts, and its share price declined by one-third over the course of a year.

At Canopy, we believe investing in high-quality companies at the moment of maximum market pessimism can deliver high returns with relatively low risk. Our Fund holds positions in several companies at various points in their dead money journey. In this instance, we increased our investment in Medpace as investor concerns mounted and the share price fell, improving its return potential, even as the recovery timing remained uncertain.

Eventually, the fundamentals reasserted themselves. In Q2, Medpace delivered a surprisingly strong result, with cancellations reverting to normal levels, driving higher net new business growth, which should support higher revenue growth over the coming years. When a positive surprise occurs in a so-called dead money stock, the reaction can be dramatic: Medpace's share price increased 50% the day after the Q2 result. While there was probably no way of predicting the result in advance, the Medpace experience highlights how long term investors can recognise a stumble, as opposed to a fall, and with conviction in the company's long-term prospects, buy quality at a discount.

Medpace

_{Source: FactSet, Medpace}

Funds operated by this manager:

Canopy Global Small & Mid Cap Fund

Performance Report: DAFM Digital Income Fund (Digital Income Class)

26 Aug 2025 - FundMonitors.com

The DAFM Digital Income Fund (Digital Income Class) rose by +1.66% in July, outperforming the RBA Cash Rate + 3% benchmark by +1.11%. Since inception in May 2021, the fund has returned +22.72% per annum, an outperformance of +16.93%...

The art of the comeback

26 Aug 2025 - Magellan Asset Management

The investment world often prizes consistency and upward momentum--but some of the most compelling returns come from companies that have temporarily lost their way.

26 Aug 2025 - The art of the comeback

By: Magellan Asset Management

The art of the comeback

Magellan Asset Management

August 2025

The investment world often prizes consistency and upward momentum--but some of the most compelling returns come from companies that have temporarily lost their way. In a recent Magellan In The Know podcast, Investment Analysts Hannah Dickinson and Emma Henderson shed light on how discerning investors can tap into turnaround stories in the consumer sector and, more importantly, how to separate real opportunity from value traps.

What makes a turnaround worth it?

At Magellan, a turnaround doesn't mean betting on distressed companies or moonshot startups. Instead, it refers to high-quality businesses facing temporary setbacks--strategic or operational missteps that lead to material share price declines but are fixable.

The rewards for identifying a true turnaround early can be significant. Successful recoveries can often result in share price rallies of 50% or more. However, the risks are just as real: historical studies show that only 20-30% of corporate turnarounds actually succeed. That's why we maintain a high bar, filtering only a few
such opportunities into our portfolios.

Four pillars of turnaround investing

The Magellan investment team apply a disciplined framework to assess whether or not a company genuinely has turnaround potential. The framework is built on four pillars:

1. Fundamentals
2. Leadership
3. Strategy and complexity
4. Timing

Let's review how these are applied.

1. Fundamentals: Is the business still high quality?

Before diving into a company's recovery strategy, we ask ourselves whether or not the business still retains its core strengths. For example, Nike, despite recent setbacks, continues to operate in an attractive industry (sportswear) and retains global brand equity and competitive advantages. Similarly, Kering's challenges
are executional rather than structural; Gucci's brand remains strong, and 'luxury' as a category continues to benefit from favourable tailwinds.

On the other hand, companies like Pepsi face more ambiguous issues, such as structural health concerns and policy shifts. These situations, while not necessarily doomed, are harder to categorise as classic turnarounds.

2. Leadership: Who is at the helm?

Successful turnarounds often depend on the right CEO. Ideally, this is someone new--an outsider with full autonomy and a mandate to make bold changes. Starbucks offers a telling case: after several underwhelming leadership transitions, the company brought in Brian Niccol from Chipotle, whose track record and
independence are more aligned with the scale of Starbucks' needs.

However, we would warn that even a celebrated CEO appointment doesn't guarantee success. If governance structures are weak or the leadership lacks experience in managing complexity, execution can flater.

3. Strategy and complexity: Is the plan credible?

We look for turnaround strategies that focus on reinforcing a company's core competitive strengths rather than cost-cutting for short-term gains. Estée Lauder, for instance, operates in a highly attractive beauty market and has new leadership but its current plan leans too heavily on easy wins like headcount reduction and Amazon partnerships. We are cautious here, citing concerns regarding innovation, outdated IT systems and supply chain complexity.

Nike, by contrast, has a more straightforward strategy: refresh its product innovation pipeline and rebuild damaged retail relationships. These are fixable issues that don't require reinvention of the business model.

4. Timing: Where are we in the recovery cycle?

Rather than trying to 'time the market', we assess whether the company is early, mid, or late in its turnaround phase. Has a credible CEO been appointed? Is the strategy clearly communicated? Have investor expectations been reset?

Nike again stands out as a case where much of the heavy lifting has occurred already. Product pullbacks have been made, reinvestment is underway, and green shoots in innovation are expected in the next 12-18 months. Conversely, Kering's turnaround is still in its early days with leadership in place, but
strategy pending.

Valuation and portfolio discipline

Valuation is particularly tricky in turnarounds, where near-term earnings are often depressed. We move beyond simple metrics like P/E ratios and instead focus on scenario analysis, assessing a range of possible outcomes and the probability distribution of returns.

Position sizing and diversification are critical. Turnarounds typically enter the portfolio as small allocations, with the Magellan investment team continually monitoring signs of progress closely. If the share price falls, we revisit the evidence: is the thesis still intact? If so, we may average down; if not, we remain disciplined in selling.

It's not for the faint-hearted, but worth the effort

Turnarounds are rarely smooth. They require patience, rigorous analysis, and a clear-eyed view of both risk and reward. However, when done correctly, anchored by strong fundamentals, capable leadership, credible strategy and well-timed execution, they may unlock unique, outsized returns.

That said, these opportunities don't come easily. They demand deep sector knowledge, disciplined valuation work, ongoing monitoring, and the ability to separate short-term noise from meaningful signals. For individual investors, that level of commitment and emotional resilience can be difficult to sustain.

That's why turnaround investing is often best approached with a disciplined framework and the resources to dig deep. It takes experience to cut through the noise, the analytical firepower to deeply understand what's truly going on inside a company, and the ability to avoid behavioural traps and know when the risk-reward equation truly stacks up.

For investors willing to do the work, turnarounds could be one of the most rewarding corners of the market.

Funds operated by this manager:

Magellan Global Fund (Open Class Units) ASX:MGOC , Magellan Infrastructure Fund , Magellan Global Opportunities Fund No.2 , Magellan Infrastructure Fund (Unhedged) , Magellan Global Fund (Hedged) , Magellan Core Infrastructure Fund , Magellan Global Opportunities Fund Active ETF (ASX:OPPT)

Important Information:

Copyright 2025 All rights reserved. Units in the funds referred to in this podcast are issued by Magellan Asset Management Limited ABN 31 120 593 946, AFS Licence No. 304 301 ('Magellan'). This material has been delivered to you by Magellan 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 financial product may be obtained by calling +61 2 9235 4888 or by visiting www.magellangroup.com.au. The opinions expressed in this material are as of the date of publication and are subject to change. The information and opinions contained in this material are not guaranteed as to accuracy or completeness. 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 and no guarantee is made that any forecasts or predictions made will materialise. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in this material. Magellan 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. 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. Further important information regarding this podcast can be found on the Insights page on our website, www.magellangroup.com.au.

Performance Report: Argonaut Global Gold Fund

25 Aug 2025 - FundMonitors.com

The Argonaut Global Gold Fund has returned +22.56% per annum since inception in November 2022, an outperformance of +18.10% relative to the S&P Global Natural Resources AUD (TR) benchmark which has returned +4.46% on an annualised basis...

Performance Report: Equitable Investors Dragonfly Fund

25 Aug 2025 - FundMonitors.com

The Equitable Investors Dragonfly Fund rose by +9.56% in July, outperforming the ASX 200 Total Return benchmark by +7.20%. Performance was driven by Mad Paws and Spectur, while Archtis and DXN detracted, and Equitable expects continued...

Manager Insights | Argonaut Funds Management

25 Aug 2025 - FundMonitors.com

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

Hedge Clippings |22 August 2025

22 Aug 2025 - FundMonitors.com

This week's much-hyped Economic Reform Roundtable in Canberra wrapped up after three days of intense discussion, polite disagreement, and a buffet of sushi and sandwiches. Billed as a landmark summit to tackle Australia's productivity...

22 Aug 2025 - Hedge Clippings |22 August 2025

By: FundMonitors.com

Hedge Clippings | 22 August 2025

Canberra's Economic Reform Roundtable: Progress or Just Another Talkfest?

This week's much-hyped Economic Reform Roundtable in Canberra wrapped up after three days of intense discussion, polite disagreement, and a buffet of sushi and sandwiches. Billed as a landmark summit to tackle Australia's productivity slump and economic resilience, the event brought together business leaders, union heads, academics, and government officials. But as the final limo left, and the last media statements were issued, one question lingered: did anything actually change?

Treasurer Jim Chalmers was naturally quick to declare the summit a success, citing "broad consensus" on ten key priorities, including tax reform, housing supply, AI regulation, and budget sustainability. He even hinted at a new road-user charge and changes to superannuation performance metrics. But for all the talk of "momentum" and "shared vision," the outcomes felt more like a policy wishlist than a roadmap, let alone action items.

The summit's structure--closed-door sessions, no phones, and a tightly managed agenda--was designed to foster focus. Yet critics argue it also stifled transparency and limited real debate. A leaked Treasury document before the summit even suggested that many of the "outcomes" had already been drafted, raising suspicions that the event was more about optics than substance, and Albo had ruled out anything not listed in May's election promises.

As a result, the summit's most ambitious and essential decisions--like meaningful tax reform or a national AI strategy--were left vague, with promises of "further consultation" and "cabinet consideration." In other words, don't hold your breath.

Business groups praised the government's willingness to listen but warned that without concrete action, the summit would be remembered as just another Canberra talkfest. The Australian Chamber of Commerce and Industry called for a 25% reduction in red tape by 2030, while unions pushed back against any reforms that might erode workers' rights. The result? A polite stalemate dressed up as consensus.

Even the Productivity Commission's call for sweeping reforms in the care economy--one of the few areas with clear, actionable recommendations--was met with cautious nods and vague commitments. Meanwhile, the elephant in the room--Australia's sluggish productivity growth--remains largely unaddressed. Dare we suggest it is unfixable?

To be fair, not all was lost. The summit did highlight areas of shared concern, such as the need for faster housing approvals, better skills recognition for migrants, and a more sustainable tax system. But without timelines, legislation, or funding commitments, these remain aspirations rather than achievements.

In the end, the Economic Reform Roundtable may have succeeded in one thing: proving that consensus is easy when nothing is actually decided. For a government keen to show it's listening, the summit was a PR win. For Australians hoping for bold economic reform, it was a reminder that talk is cheap--and Canberra has plenty of it.

Tonight will see another summit - this time the US Federal Reserve's annual August summit, coming from Jackson Hole in Wyoming, where Fed Chair Jerome Powell's speech will likely have more effect on both the Global and Australian economies in one hour than the combined words spoken over three days in Canberra.

Unless Powell indicates he's ready to drop rates, he's likely to get another broadside from Donald Trump, who to date has only called him not smart, a major loser, a stubborn mule, and a numbskull.

Expect more of the same.

Video

Manager Insights | Argonaut Funds Management

News | Insights

Investment Perspectives: 10 charts shaping our thinking | Quay Global Investors

Market Commentary | Glenmore Asset Management

July 2025 Performance News

Altor AltFi Income Fund

Canopy Global Small & Mid Cap Fund

Glenmore Australian Equities Fund

Quay Global Real Estate Fund (Unhedged)

Bennelong Concentrated Australian Equities Fund