JULY 2022
JULY 2022

Cadence Capital Limited returned a gross positive performance of 2.3% in July, compared to the All Ordinaries Accumulation Index which was up 6.3% for the month. The top contributors to performance during the month were Whitehaven Coal, New Hope, Terracom and Tietto Minerals. The largest detractors from performance were BHP and Alibaba Group.

Markets recovered in July after the sell-off in June, with some of the worst performing sectors in the first half of calendar 2022 leading the rally. For example, the ASX Technology sector was up 19.5% during the month. The fund increased its net exposure during the month as it scaled back into existing positions which resumed trend as well as adding several new positions which meet our criteria. The portfolio’s short exposure detracted value in July and was reduced as we scaled out of some of these positions. As of 31 July 2022, the Company was 48% invested (52% cash and cash equivalents).

Fully Franked Year-End Dividend

On the 15 July the Company announced a 4.0 cents per share fully franked year-end dividend bringing the full year dividend to 8.0 cents per share fully franked. This is a 60% increase on the previous year’s dividends of 5.0 cents per share reflecting the strong performance of the company over the past few years and the build-up of profit reserves.

This full year dividend of 8.0 cents per share fully franked equates to an 9.0% fully franked yield or a 12.9% gross yield (grossed up for franking credits) based on the share price of $0.885 per share on the date of the announcement. Importantly this equates to an 8.1% dividend yield based on the current pre-tax NTA of $0.991, as the Company shares are currently trading at a discount to NTA despite recent strong performance and a 16-year track record of significant outperformance against the All Ordinaries Accumulation Index. After paying this dividend the Company still has around 25 cents per share of profits reserves to pay future dividends.

The Ex-Date for the dividend is the 17 October 2022. The payment date for the dividend is the 28 October 2022. The dividend re-investment plan (DRP) will not be in operation for this final dividend as the Company’s shares are trading at a discount to the underlying NTA.

Year-end Audiocast

Earlier this month the Company released its June 2022 Year end Audiocast. In this year-end audiocast, Karl Siegling firstly provides an update on the Company’s year-end performance, the 4.0c per share fully franked year-end dividend, the portfolio’s current composition and the increasing interest rate trend. Karl Siegling, Charlie Gray and Jackson Aldridge then discuss their long positions in Whitehaven Coal, Newhope Coal and Resmed and their short positions in Graincorp and Textainer Group. Karl Siegling then finishes with an update on the outlook for 2023.

Fund NTA

Fund Performance

* Gross Performance: before Management and Performance Fees

Fully Franked Dividends Declared Since Listing

* Off market equal access buy back

Historic Portfolio Exposure

Portfolio Sector Analysis

Top 20 Portfolio Positions

Portfolio Market Capitalisation Analysis

Recent News

We encourage you to visit our 52 books you should read before buying your next stock page on our website. We have compiled a list of books/ documentaries that have influenced our investment style or helped provide insight into the Cadence investment process. To view all previous Cadence webcasts and press articles, please visit the Media Section of the website.

10 Books To Read Before Buying Your Next Stock

10 Books To Read Before Buying Your Next Stock

Funds management involves a lot of synthesis of information and reading. Over the years we all end up reading many investment books and refer to them from time to time.

The team at Cadence has compiled a list of books that have influenced our investment style, or helped provide insight into the investment process.

Whilst not an exhaustive list, the 10 titles contained in this eBook provide a good starting point for any interested investor.

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