Cadence Opportunities Fund returned a gross performance of 2.8% in August, compared to the All Ordinaries Accumulation Index which was up 1.3% for the month. The top contributors to performance during the month were Whitehaven Coal, Terracom, Bowen Coking Coal, Syrah Resources, New Hope and Appen. The largest detractors from performance were Funko Inc and Melbana Energy. As of 31 August 2022, the Company was 65% invested (35% cash).
The fund’s exposure to energy and in particular thermal coal producers, again contributed meaningfully to portfolio returns as thermal coal prices continued to trend higher in advance of the northern hemisphere winter. This investment theme remains one of the few strong sector trends occurring in global markets currently. The recent reporting season on the ASX showed relative resilience from some of Australia’s largest companies, while the results from smaller companies as usual were much more varied. Outlooks were in many cases guarded given headwinds from rising interest rates and the potential impacts to demand. Following meeting with a broad range of business executives and companies, we are continuing to find a larger number of investment opportunities meeting our criteria across the energy and resources sectors.
Fully Franked Year-End Dividend
During July the Company announced a 7.5 cents per share fully franked year-end dividend, bringing the full year dividend to 15.0 cents per share fully franked. This full year dividend of 15.0 cents per share fully franked equates to an 6.3% fully franked yield or an 8.9% gross yield (grossed up for franking credits) based on the share price of $2.40 per share on the date of this announcement. After paying this dividend the Company still has 44 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 28October 2022. The Dividend Re-Investment Plan (“DRP”) is in operation for the year-end dividend. The issue price will be at a 5% discount to the weighted average of the prevailing share price over the relevant DRP pricing period. If you are not registered for the DRP and you would like to participate, please contact Boardroom on 1300 737 760.
Register for upcoming Cadence roadshow
We would like to invite you to join the Cadence Investment team to discuss the Cadence funds, recent performance, portfolio positions and the investment outlook for the year ahead.
- Brisbane: Monday 10 October 2022, 10.30am – 11.30am
- Melbourne: Tuesday 18 October 2022, 10.30am – 11.30am
- Perth: Wednesday 26th October 2022, 10.30am – 11.30am
- Adelaide: Friday 28th October 2022, 10.30am – 11.30am
- Sydney – CDM AGM: Wednesday 16th November 2022, 2.00pm – 4.00pm
Please click here to register to attend.
Historic Portfolio Exposure
Portfolio Sector Analysis
Last 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 performance, the 7.5c fully franked year-end dividend, the current portfolio composition and the increasing interest rate trend. Karl Siegling, Charlie Gray and Jackson Aldridge then discuss some of the funds core investments (WHC, NHC, PYPL US, AMP) and some of the funds trading positions (SMR, BCB, TIE, DHG, PNI, NAN and CCX). Karl Siegling then finishes with an update on the outlook for 2023.
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 investment process. To view all previous Cadence webcasts and press articles, please visit the Media Section of the website.