Cadence Capital Limited was down 0.3% in May, outperforming the All Ordinaries Accumulation Index by 2.8%. Year to date the fund is up 7.2%, outperforming the All Ordinaries Accumulation Index by 5.1%. Over the past two years the fund is up 24.0% per annum, outperforming the All Ordinaries Accumulation Index by 7.3% per annum. For May the top contributors to performance were Terracom, Whitehaven Coal, Schlumberger, New Hope and Stanmore Coal. The largest detractors from performance were Tietto Minerals, Flight Centre Travel Group and Johns Lyng Group. As at 31 May 2022, the Company was 64.8% invested (35.2% cash and equivalents).
Recent sector trends persisted through May with energy remaining the clear leader while small capitalisation and ‘growth’ style equities led the rest of the market lower. The RBA joined its international peers in raising interest rates by 0.50% early in June and signalled further increases ahead. The trajectory of higher inflation and interest rates is a significant headwind for risk assets, just as low inflation and interest rates has benefitted markets over the past 30 years. The fund’s high weighting to energy continues to deliver strong returns for investors, while high cash levels and a larger short book also aided performance.
Fully Franked Half Year Dividend
The Company’s 4 cents per share fully franked half year dividend was paid 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.
As the portfolio has changed substantially over the past 6 months, if you have not done so already, we strongly recommend that you watch the March 2022 Quarterly Audiocast . In this audiocast Karl Siegling firstly provides an update on the Company’s performance, fully franked interim dividend, portfolio composition and the funds current cash levels. Charlie Gray and Jackson Aldridge then discuss some of the company’s investment themes and its positions held in AGL, AMP and 5 coal stocks. Karl Siegling finishes with an update on the outlook for 2022.
* 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
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