Cadence Capital Limited was up 4.9% in March, compared to the All Ordinaries Accumulation Index which was up 6.9% for the month. For the 9 months ended 31 March 2022 the fund is up 8.8%, outperforming the All Ordinaries Accumulation Index by 2.5%. For March, the top contributors to performance were Whitehaven Coal, New Hope, BHP Group, Champion Iron, Mosaic, Woodside Petroleum and Stanmore Coal. The largest detractor from performance was Square Inc. As at 31 March 2022, the Company was 81% invested (19% cash and equivalents).
Markets recovered through March with resources, energy and financial sectors leading. Increased participation from smaller capitalisation commodity related stocks was also a feature, with fund returns benefitting from participation in selective equity raisings and placements which met our criteria. High cash levels and the short book detracted from performance during the month given the strong index return. Since month end, there has been notable weakness from some typically economically sensitive sectors such as transport, semiconductors and shipping potentially indicating higher interest rates and elevated inflation is starting to take its toll on end consumer demand. This will be an important trend to monitor.
Fully Franked Half Year Dividend
The Company’s 4 cents fully franked half year dividend went ex-dividend on the 31 March 2022 and will be paid out on the 14 April 2022. This interim dividend equated to an 8.2% annualised fully franked yield or a 11.7% gross yield (grossed up for franking credits) based on the share price on the date of the announcement of $0.98 per share. Importantly this equated to a 7.2% dividend yield based on pre-tax NTA, as the Company shares are currently trading at a discount to NTA despite the fund’s 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 30 cents per share of profits reserves to pay future dividends.
* 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
We recommend that you watch the December 2021 half year Audiocast where Karl Siegling firstly provides an update on the Company’s half year results, fully franked interim dividend and the portfolio’s composition. Charlie Gray and Jackson Aldridge then discuss some of the Company’s investment themes and positions held. Karl Siegling finishes with an update on the outlook for 2022.
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.