NEWS
20 Mar 2026 - Hedge Clippings |20 March 2026
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Hedge Clippings | 20 March 2026 It's been a volatile week for markets, interest rates, and above all, the politics of war. In Australia, the RBA raised rates for the second month in a row after cutting three times last year, including as recently as August. That suggests the Board may have moved too far, too soon on the way down, and there is now a real risk it may be jumping too quickly on the way back up. With inflation still stubborn and global uncertainty rising, and inflation with it, the RBA was clearly stuck between a rock and a hard place, which was reflected in the narrow 5-4 vote in favour of a hike. Hedge Clippings' experts Nick Chaplin and Renny Ellis, who argued against last year's cuts, were equally emphatic this week when we spoke to them that the Board could well have - and should have - held their nerve. With the next meeting only five or six weeks away, there was a strong case for waiting, and allowing February's increase more time to work through the economy, for February's inflation data to land, and for the fallout from the closure of the Strait of Hormuz -- and the likely duration of the conflict -- to become clearer. As Jerome Powell said after this week's Fed meeting when they kept rates steady, "we just don't know what comes next". Fair point. Right now, neither do markets, central banks, nor anyone trying to price risk with a straight face. And for that, investors can once again send a silent thank you (or maybe some other message) in Donald Trump's direction. News | Insights Expert Analysis of the RBA's March 17 Rate Decision | Seed Funds Management & Arculus Funds Management 10k Words | Equitable Investors February 2026 Performance News Bennelong Emerging Companies Fund Glenmore Australian Equities Fund Seed Funds Management Financial Income Fund Insync Global Capital Aware Fund |
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13 Mar 2026 - Hedge Clippings |13 March 2026
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Hedge Clippings | 13 March 2026
"It never rains, but it pours" is an old phrase that comes to mind when considering markets and global politics at present. AI, which had been driving sections of the market (and the market as a whole) since it was launched in the form of ChatGPT in November 2022, has seemingly turned from being a positive, and now reflects many of the risks (disruption, employment, capex, energy). Market darlings, such as Aussie home grown Atlassian, are indicative as they announced layoffs of 1600 staff this week, and have seen their share price fall from a peak of US$483 in October 2021, to below $75 as of now. Meanwhile, to the end user, AI's benefits are being implemented into everyday business operations at an amazing pace. Closer to home, February's reporting season was one of the most volatile on record. Two thirds (66%) of funds' performance numbers have been received to date, with wild fluctuations thanks to an ASX reporting season which provided plenty of surprises - both to the upside and on the downside. Overall, the ASX 200 Total Return (TR) index rose 4.11%, while the ASX Small Ordinaries (TR) fell by 2.57%. In this environment, many active equity managers struggled, while others, (although only 10% outperformed the ASX 200 TR) produced some impressive numbers. For the month, returns ranged from -21% (digital) through to +13.29% (not surprisingly, a global gold fund, Argonaut) reflecting their respective underlying asset or market sector. Over 12 months that became even more pronounced, with returns ranging from -53% (digital again) through to +233% (gold and key minerals again). While these outliers were obviously driven by headwinds or tailwinds respectively, between the extremes, a combination of strategy, sector, peer group, and most importantly, old fashioned manager skill, determined the outcome. Of interest was the appearance in February's top performers of Japanese Equity funds (average 12.10%), and Infrastructure Funds (average February return of 7.73%), while Managed Futures (Winton +5.05% and ECCM +4.59%) also stood out, alongside the inevitable gold, precious metals, and resources funds. Meanwhile the world suffers financial upheaval. If the rotation out of tech in the US, along with February's reporting season, weren't enough to throw markets into a turmoil, the US and Israeli attack on Iran completed the perfect storm. Somehow ("I'll end all wars") Trump seemed to think US arms and firepower would quickly bring the Iranian regime, and its 90 million + inhabitants to their knees begging forgiveness. He is obviously not a student of history when it comes to US overseas military endeavours, including Vietnam, Iraq, and Afghanistan, all of which (for the US at least) ended badly. This one is yet to play out, but whatever Trump claims, "quick" and "victory" seem a while away. Closer to home. We had the pleasure of interviewing George Bory from Allspring this week, a US$485 billion manager of Global Income funds and strategies being distributed in Australia by the team at Bennelong Funds Management. We managed to cover not only Allspring's and George's approach to bond investing - "Manage risk, rather than avoid it" - through to the current situation in the Middle East and its potential economic outcome, and finally the outlook for the US given the mid term elections which may or may not clip Trump's wings somewhat. You can see the full video here, or view the individual sections. Next week there's an RBA board meeting on Monday and Tuesday. As if things weren't complex and difficult enough already! We'll be joined as usual by our resident experts Nick Chaplin from Seed Funds Management and Renny Ellis from Arculus, to preview what they think the RBA is likely to do, and what they should do - which of course might be completely different. News | Insights Manager Insights | Allspring Global Investments Ben McVicar discusses the data centre effect | Magellan Investment Partners February 2026 Performance News Bennelong Concentrated Australian Equities Fund |
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6 Mar 2026 - Hedge Clippings |06 March 2026
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Hedge Clippings | 06 March 2026
This week we interviewed two small cap managers via Zoom: Dean Fergie from Cyan Investment Management, and Martin Pretty from Equitable Investors, to get their take on the recent reporting season, which in a word, if you hadn't noticed, was volatile. You can view the video here, or from the summary below. Wilsons Advisory noted when only halfway through reporting season that: "Even modest earnings surprises triggered double-digit share-price moves, reflecting stretched valuations, shifting sector leadership, and heightened sensitivity to forward guidance rather than historical results. Several large-cap companies moved sharply on the day of their results, with investors reacting quickly to any deviation from expectations. By the end of the month, as reporting drew to a close, the volatility and market's reactions had only increased, with an overall backdrop of the negative effects of AI - or at least concerns about overly stretched valuations as a result of the euphoria of the past couple of years since Chat GPT and others changed the world as we knew it, along with the ongoing strength of rare earths and precious metals, and the sagging price of Bitcoin and other cryptocurrencies. The consensus - in the true sense of the word as both Dean and Martin were each in agreement on almost all points - was that many companies with "stretched" valuations didn't front up to investors' expectations. On the upside, companies which had possibly been considered boring, or not on the AI wagon, caught the market's attention. The discussion ranged not only from "what's" driving the market, but also the "who" - to what extent are index funds and program trading having an outsized effect, and how much influence are short terms traders seeking a quick killing having? In any event, the ASX 200 total return as a whole rose by 4.11%, taking it to +16.19% for 12 months, (whilst the more volatile Small Ordinaries fell by 2.8%), or the S&P 500 which fell by 0.76% in February, but also rose by 16.99% YoY. From a fund manager's perspective it was either a difficult, or spectacular month, along with plenty in between, based on the ~30% of funds that have reported to date, with returns ranging from -11% through to +11%, further emphasising our point from last week that active management can have an outsized effect on investors returns - provided you choose the right manager, with the right strategy, and at the right time! We originally scheduled the video with Dean and Martin before the US and Israel unleashed their joint air attacks on Iran last Saturday. Since then of course global volatility and uncertainty has also been unleashed, creating a whole different set of uncertainties, and possibly some opportunities for investors and fund managers alike. Uncertainty flowed through to the RBA as well, with Governor Michele Bullock keeping her options open on the chance of a rate rise in less than two weeks time, ahead of the next monthly CPI number due on 25th of March. However, in the current global environment, those two weeks leave an awful lot of variables, and potential outcomes, which could come into play. News | Insights Manager Insights | Cyan Investment Management & Equitable Investors Data demand heats up | Magellan Investment Partners February 2026 Performance News |
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27 Feb 2026 - Hedge Clippings |27 February 2026
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Hedge Clippings | 27 February 2026 Wednesday's January monthly CPI figure, which came in at an annualised 3.8%, unchanged over the previous month, was not the news that either Jim Chalmers or Michelle Bullock would have wanted, nor, for that matter, anyone with a mortgage. Worse still was the trimmed mean result, the RBA's preferred inflationary measure, which edged up to 3.4% from the previous month's result of 3.3%. Amongst the details, but certainly not hiding, was an increase in electricity prices of over 32%, up from 21% in the previous month, and various government subsidies and handouts expired. Chalmers will be hoping that the effects of the RBA's rate rise earlier this month will kick in quickly, although it probably won't come quickly enough for the February number, due out on the 25th of March to have any influence on the RBA when they meet the week before. It's looking decidedly as if inflation of 3-4% is in danger of becoming entrenched, so the decision for Bullock and her board will hinge between biting the bullet and hiking rates again - either in March, and if not then in May - or hoping for the best. Unfortunately, "hope is not a strategy", and history indicates that rate rises seldom occur in isolation. What must now be clear to the RBA, albeit with the benefit of hindsight, is that they moved too soon - or too quickly, or both - when cutting rates three times last year. Moving on... There has been renewed focus recently on the benefits or otherwise of "active" fund management, compared with "passive" management via an index or ETF. The case for passive seems simple on the surface: Why pay "active" fees when the returns of the average fund struggle to exceed the index, or the low fee ETF, which tracks the weighted average return of all companies in the index? The argument becomes more compelling in times of strong equity markets, when the underlying market (and therefore the ETF) is, or has been, providing above long term average returns. For instance, in the Australian small and mid-cap space, the average 12-month return in AFM's Peer Group of 99 funds to the end of January was 13.38%, against the S&P/ASX Small Ordinaries Index of 22.75%, although the result was closer over 3 years at 11.62% and 12.08% respectively, and almost level pegging at 7.77% and 7.48% over 5 years. The data covering large-cap funds vs. the ASX 200 is similar, although returns from the smaller end of the market are significantly higher. The problem or catch is the term "average". Just as the index comprises companies that have performed significantly better (and in some cases many times) or worse than the market average, the same goes for managed funds. In the small mid-cap space, more than 10% of the funds returned over 30% (after fees), with the top 2, Aliwa Alpha, and SGH Emerging Companies, both returning over 50%, or double the index return of 22.75%. Over 3, 5, and 7 years, the same trend is apparent. This applies across all equity peer groups. Manager and fund selection are critical to performance. Equally critical is the consistency of performance, as well as, when it occurs, the length and depth of any negative returns or drawdowns. Taking a single year or term, particularly looking through the rear-view mirror seems simple, and can be misleading and dangerous. For clear analysis of fund performance and risk across all peer groups, log on to FundMonitors.com to compare funds using our quant Star Ranking analysis across any of 16 different peer groups. Choose funds with a consistent rank of five, four, or even three stars across multiple time frames - particularly 5 or 7 years if applicable, to select an above "average" return. News | Insights Manager Insights | East Coast Capital Management 2025 Responsible Investment and Stewardship Report | 4D Infrastructure Property Update | Australian Secure Capital Fund January 2026 Performance News Bennelong Emerging Companies Fund DAFM Digital Income Fund (Digital Income Class) Insync Global Capital Aware Fund |
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20 Feb 2026 - Hedge Clippings |20 February 2026
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Hedge Clippings | 20 February 2026
It's not great news for Jim Chalmers either, although being a politician trying to defend the obvious, he wasn't going to admit to that; instead, it was a "reminder of the resilience of our labour market", which is undoubtedly true. Unfortunately, that's not what the RBA would have been wanting to hear. Jim was quick to quote Michele Bullock's comments last week that the state of the labour market was good news for the economy. Meanwhile, Chalmers was equally quick to denigrate Bullock's predecessor, Philip Lowe, who had the temerity to criticise the government's record when it came to handouts and spending, and productivity growth. Both Chalmers and Albo had a crack at Philip Lowe to try to deflect his comments and criticism by playing the man, and not the ball, which is unsurprising, even if they would be better off listening to Lowe and nearly every other economist and trying to fix the problem. And their problem is this: The government is addicted to handouts because they help them get re-elected at election time, even though inflation may be higher than it should be as a result. As Paul Keating once famously said, "In the race of life, always back self-interest. At least you know it's trying". So we're stuck in the slow lane (productivity-wise) and the too-fast lane when it comes to inflation (+3.8% to December), which is outstripping growth in wages, which only grew by 3.4% over the same period. Once again, Jim Chalmers tried to put a positive spin on it (as he would) by saying that workers are earning more now than they were a few years ago. Unfortunately, they're no better off than they were. Looking forward, it's likely the RBA will sit on their hands in March, but that may not be the case by May, with NAB and other bank economists expecting further rate rises just as Chalmers delivers his next budget. Look out! News | Insights 10k Words | Equitable Investors Market Commentary | Glenmore Asset Management January 2026 Performance News 4D Global Infrastructure Fund (Unhedged) |
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13 Feb 2026 - Hedge Clippings |13 February 2026
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Hedge Clippings | 13 February 2026 The normally calm and rational exterior persona of RBA Governor Michele Bullock was rattled this week when her integrity was questioned during a heated Senate estimates hearing, when she was accused by Nationals senator Matt Canavan of "gaslighting" Australians when describing the economy as doing "okay". Given the current state of the Federal coalition, it is no wonder that Canavan tried to distract attention away from both the on-again-off-again shambles within the opposition, or the fact that they have been incapable of landing a blow on either Chalmers or Albanese, in spite of the opportunity, or need, to do so. However, it caused Hedge Clippings to turn to the dictionary (via Google) to clarify the term "Gaslighting", which wasn't a term with which we were overly familiar. It turns out it was the Merriam-Webster Dictionary "Word of the Year" in 2022, and is defined as "the act or practice of grossly misleading someone, especially for one's own advantage". No wonder that Canavan, and no doubt most politicians we can think of, are familiar with and use the term, given how well versed they must be in its implementation. And no wonder that Michele Bullock was so quick to refute the allegation. The RBA may well have jumped too quickly when cutting rates three times last year, only to see inflation start to nudge back up again, but to consider their statement and Bullock's media conference post meeting as "misleading" was bound to elicit a swift rebuttal. What obviously irked Canavan was that Bullock refused to pin the blame for rising inflation on Jim Chalmers and government spending, instead noting that while it contributed, there were other factors involved, including private demand, which had been stronger than expected. She also raised one of the major issues for the economy, namely stagnant productivity, which she termed "Australia's non-inflationary speed limit", and that unless productivity lifts, the economy may struggle to grow sustainably above 2% without fueling inflation further. Unfortunately, we can't see productivity suddenly changing, and if that's the case, it's likely that inflationary pressures will continue to rise, as will interest rates. News | Insights Magellan Global Equities Quarterly update | Magellan Investment Partners Market Update | Australian Secure Capital Fund January 2026 Performance News Bennelong Concentrated Australian Equities Fund |
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6 Feb 2026 - Hedge Clippings |06 February 2026
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Hedge Clippings | 06 February 2026 Tuesday's rate increase by the RBA of 0.25% to 3.85% was well telegraphed by market expectations leading up to the meeting, thanks to December's annual inflation number jumping to 3.6%, even though those same market expectations had been for a reduction in inflation prior to the number being released. One could cynically assume that the market is no better at forecasting the movement of either inflation or the cash rate than the RBA itself. What is also clear, albeit with the benefit of hindsight, is that the RBA should not have cut rates three times in 2025, and even when they did so for the third time in August, the market - particularly the big four banks, but also practically every other noted economist - should not have jumped on the bandwagon and forecast a further 2 or 3 reductions by mid to late 2026. Seed Fund Management's Nick Chaplin and Renny Ellis from Arculus Funds Management have both been arguing against last year's cuts from the RBA, and the banks' forecasts, every time we met with them over the past year, but without the benefit of hindsight. We caught up with Nick and Renny immediately after Michele Bullock's media presentation on Tuesday, (see video link below) and they were adamant (again, without the benefit of hindsight) that the RBA had got it wrong, including the view that the first cut in February, in the lead-up to a federal election, was unwise. That was followed by a further cut in May, and under intense pressure from the media and Treasurer, again in August, even though the inflation outlook at that time was questionable, thanks to multiple government energy rebates. For a homeowner with a mortgage, you've just got to suck it up and take the view that at least you had 6 to 12 months of reduced payments before your repayments went back up again. Shame about the budget planning though! Now those same budget plans are having to factor in the market expectations for two or possibly three further rate rises this year, in place of the two reductions expected just 3 months ago, so in effect a reversal of over 1%. However, the RBA is not alone. Rates are expected to remain unchanged in the Euro area over the remainder of 2026, and possibly increase in Japan and New Zealand. The US is, of course, the outlier, in that it could go either way, once Powell has been replaced by Trump's nominee in May. One would expect whoever Trump had nominated would do his bidding, but there are suggestions that Kevin Warsh may hold the line on the Fed's independence. News | Insights Expert Analysis of the RBA's February 03 Rate Decision Global Matters: 2026 Outlook | 4D Infrastructure Quarterly State of Trend report - Q4 2025 | East Coast Capital Management January 2026 Performance News Quay Global Real Estate Fund (Unhedged) |
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30 Jan 2026 - Hedge Clippings |30 January 2026
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Hedge Clippings | 30 January 2026
News | Insights New Funds on FundMonitors.com Magellan Infrastructure Quarterly Update January | Magellan Investment Partners Trip Insights: Canada - US | 4D Infrastructure December 2025 Performance News Insync Global Capital Aware Fund Quay Global Real Estate Fund (Unhedged) |
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23 Jan 2026 - Hedge Clippings |23 January 2026
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Hedge Clippings | 23 January 2026December's stronger than expected unemployment rate of 4.1% (down from 4.3% seasonally adjusted) indicated that, in simple terms, the labour market is running hotter than the RBA would ideally like. Demand for workers remains solid, wage pressures are unlikely to fade quickly, and the risk of inflation sticking around for longer stays on the table. If only labour productivity were increasing! For the RBA's first meeting of the new year, due on 2-3rd of February, this makes a near-term rate cut highly unlikely, although it may be a meeting too early to see rates rise. The RBA has been clear that it wants to see convincing evidence that inflation is moving sustainably back to target, and a tight labour market works against that narrative. Based on the unemployment rate, a hold is the base case scenario, with the Bank reinforcing its "higher for longer" stance rather than opening the door to easing. Of course, that could all go out the window when December's monthly CPI figures are released next Wednesday. Expectations are for headline inflation to continue easing, helped by goods disinflation, lower freight costs and softer discretionary spending. However, the real focus will be on the underlying measures, particularly trimmed mean inflation. Consensus is that this will remain sticky, especially in services such as rents, insurance, health and education. Whatever the outcome, an easing is unlikely given the cautionary nature of the RBA's mindset, and particularly after they probably consider they might have jumped the gun when cutting rates to 3.6% last August, following previous cuts in May, and before that in February. The August rate cut led leading economists from the big four banks and others to get overly excited, with AMP's Shane Oliver expecting the RBA to cut further last November, and again in February and May, taking the cash rate to 2.85%. Followers of Hedge Clippings may remember that our regular market experts, Nick Chaplin from Seed Asset Management and Renny Ellis from Arculus, were not only critical of the RBA's August move but also correctly warned against those betting on a further cut in November. When we last spoke to them before Christmas, they were of the view that the RBA's next move could well be up, so we look forward to checking in with them once next week's CPI results are out. For those who think Michele Bullock's gig as RBA Governor is difficult, with calls from economists and homeowners to drop rates, and no doubt with some quiet pressure behind the scenes from Treasury and Jim Chalmers, spare a thought for Jerome Powell. The Fed Chair is facing a criminal investigation (but no charges yet) relating to his congressional testimony about cost overruns at the Federal Reserve's headquarters. Powell claims it is because he won't bend to Trump's bidding to cut rates. We shall watch the outcome with interest. Will the Justice Department chicken out, or continue Trump's bidding? Powell's term as Fed Chair ends on the 15th of May (assuming Donald doesn't re-appoint him), although his term as a board member runs until January 2028. Coincidentally, that is when the next President is due in the White House, assuming Trump doesn't find a way to run again. Tempting though it may be to comment on Donald Trump's other regular and recent pronouncements and activities, there doesn't seem to be much that we could add. If nothing else, he's a media godsend and seemingly insistent on being at the centre of the news. If not, he'll say or do something to make sure he is. Watch this space, but importantly, have a great Australia Day holiday celebration. News | Insights 10k Words | Equitable Investors December 2025 Performance News Bennelong Long Short Equity Fund Seed Funds Management Financial Income Fund Bennelong Twenty20 Australian Equities Fund |
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In 2025, there were a number of major themes that dominated markets and the news, and which in turn influenced returns of the various peer groups and the managed funds operating within them.
16 Jan 2026 - Hedge Clippings |16 January 2026
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Hedge Clippings | 16 January 2026Looking forward, Looking back, Welcome back! In 2025, there were a number of major themes that dominated markets and the news, and which in turn influenced returns of the various peer groups and the managed funds operating within them. Equity-based funds continued to benefit from the tailwinds of strong global equity markets, which saw the S&P 500 (T/R) deliver just shy of 18%, while the ASX 200 lagged that at 10.32%. The 542 equity-based funds in AFM's database averaged a return of 13.2%, with 55% of them outperforming the ASX 200. However, averages can be misleading! Fund selection remained (as ever) critical to success, with individual fund results ranging from -20% through to an impressive return of 294%. The question for investors and fund managers alike is whether the dominant themes of 2025 will continue into 2026? There's no reason to think they won't, and there's no reason that just rolling over from December 2025 into January 2026 will mysteriously change last year's trends. Global Technology and AI: The tech juggernaut, and particularly the focus on AI, rolled on - or did it? The bottom line is that the "Magnificent 7" became a "Dominant Duo" consisting of Alphabet and Nvidia. The so called Magnificent 7 averaged a return for the year of 27.5% outperforming the S&P 500 by a clear 10%, but that hid that fact that Alphabet (Google) and Nvidia were up 65%, and 40% respectively, while Microsoft (15%), Meta (13%), Apple (8%), and Amazon (6%) all underperformed the S&P 500. Elon Musk's Tesla, the last of the Mag 7, rose about 15% to be broadly in line with the market, having scored a few own goals, and distractions during the year. Artificial Intelligence dominated markets. It seems unlikely the focus and adoption of AI will wane - if anything, it is likely to continue to expand and dominate, but with question marks around stretched valuations, energy, and at a stock level, which horse to back there are likely to be both winners and losers. Gold, Precious metals, and Resources: In 2025 gold rose 65%, silver was up almost 150%, platinum 127%, while copper rose over 40%. Critical minerals and rare earths became both valuable and a geopolitical point of leverage. Not surprisingly, funds investing in resources, in part or exclusively, dominated the top-performing tables in 2025, with the Top five returning between 102% and 294% in 2025. As can be seen, resources are cyclical. Will the drivers of the precious metals boom continue? As always, there are those saying "this time it is different," although the queues of retail punters lining up in Martin Place each morning outside the bullion dealer suggest a toppy market. Geopolitics and the Trump Factor: The Trump Factor is one theme we're confident will remain in 2026. In the first two weeks of the year, Trump is dominating the headlines as only he can, including threatening the regime in Iran, kidnapping the President of Venezuela, eyeing off Greenland, and, closer to home, continuing to bully Jerome Powell (or trying to) into lowering interest rates. The problem for investors is that it is difficult to predict his unpredictability! If he persists with his intention to absorb Greenland, it is likely to end the NATO agreement - but maybe that's his ulterior motive? News | Insights Investment Perspectives: Thinking about A-REITS | Quay Global Investors Affordability is a hot button issue for 2026 | Magellan Asset Management December 2025 Performance News Bennelong Australian Equities Fund 4D Global Infrastructure Fund (Unhedged) Bennelong Concentrated Australian Equities Fund Glenmore Australian Equities Fund |
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