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10k Words Equitable Investors December 2025 (2-minute read) There is a chasm in the return drivers of Australian equities v. US equities in CY2025. Large cap (ASX 200) EPS has been soft (and there has been few new ASX listings to spur growth on). US growth has had an AI kicker. But on the flip-side. tech giant Oracle's AI spending plans have resulted in a surge in its credit default swaps. Fund manager cash weightings are at lows, as "quality" as an investment factor has been shunned. "Growth" stocks have dominated in the US over the past 20 years BUT if you step your timeline out a bit, back to May 2020, it took ~25 years for growth stocks just to get back to neutral with the market. Inflation and interest rate expectations continue to drive sentiment. Hedge funds have been loading up on government debt. Finally an analysis comparing like-for-like private equity returns v public equity returns demystifies PE. Sources of returns - CY2025 to December 5, 2025 
Source: JP Morgan Asset Management ASX 200 12m forward EPS decline v index price rise 
Source: MST Marquee, L1 Capital The value of IPOs year-to-date CY2025 v year-ago by region 
Source: LSEG, WSJ Analysts' revenue expectations for AI exposures in the top 3000 US companies 
Source: Goldman Sachs Global Investment Research Oracle credit default swaps spike 
Source: Bloomberg Global Fund Manager Survey - average cash level (%) at ~15 year low 
Source: Bank of America Performance of iShares USA Quality ETF / SPDR S&P 500 ETF 
Source: Koyfin iShares Russell 1000 Growth ETF / SPDR S&P 500 ETF - 20 years 
Source: Koyfin iShares Russell 1000 Growth ETF / SPDR S&P 500 ETF - since May 26, 2000 
Source: Koyfin Global inflation heatmap 
Source: JP Morgan Asset Management Implied Australian cash rate expectations 
Source: Bloomberg, @Scutty Hedge fund exposure to sovereign debt ($US trillion) 
Source: Financial Times, BIS US private equity direct alphas, relative to subindustry matched Small-Cap US public equities 
Source: "Has Private Equity Outperformed Public Equity?", The Journal Private Markets Investing, Fall 2025 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. |
