Cadence Opportunities Fund was down 5.2% in January outperforming the All Ordinaries Accumulation Index by 1.4%. The Company has had a strong start to FY22 with the fund up 14.8% over the first seven months of the year, outperforming the All Ordinaries Accumulation Index by 17.1%. For January, the top contributors to performance were Champion Iron, Tietto Minerals, OpenDoor Technologies and AMC Entertainment. The largest detractors from performance were Johns Lyng Group, HiPages, Swoop Holdings and Beforepay Group. At 31st January 2022, the Company was 56.2% invested (43.8% cash).
Risk-off sentiment from December continued into January with global equity markets falling between 5-10% during the month. The selling was broad-based, with stocks that had held up in prior months, such as mega-cap stocks in the US and large-cap stocks on the ASX, also declining. Portfolio cash levels increased significantly as the fund scaled out of positions which rolled over. Increased shorting activity was also a feature and contributed positively to returns. The trend towards energy and resources and other sectors that benefit from high inflation and increasing interest rates continued in January. The fund added to existing positions and initiated new positions across these sectors which continue to meet our criteria, as well as increasing our exposure selectively to other areas of emerging strength such as the travel sector.
Half Year Audiocast
In the coming weeks we will be releasing the December 2021 half year audiocast which will discuss the Company’s first 6 months performance, its portfolio composition, its current investment themes and holdings, and the outlook for the rest of the year.
Fully Franked Half Year Dividend Declared
On the 14th January the Board declared a 7.5 cents fully franked half year dividend, an annualised increase of 25% on last year’s ordinary dividends. This interim dividend equates to a 5.1% annualised fully franked yield or a 7.3% gross yield (grossed up for franking credits) on the share price on the date of the announcement of $2.94 per share. After paying this dividend the Company still has more than 50 cents per share of profits reserves to pay future dividends
The Dividend Re-Investment Plan (“DRP”) is in operation for the interim 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.
The Ex-Date for the dividend is the 31st March 2022. The payment date for the dividend is the 14th April 2022.
Historic Portfolio Exposure
Portfolio Sector Analysis
Cadence Opportunities Fund held its AGM and Investor Briefing in December 2021. At the Investor Briefing, Chairman Karl Siegling started by giving an update on the Company’s recent IPO, performance, dividends, profits reserves and franking balances and its current portfolio structure. Portfolio managers Jackson Aldridge and Charlie Gray then discussed CDO’s trading statistics and a number of the company’s current positions. Karl Siegling closed off with the outlook for 2022. Click here to view this Investor Briefing.
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.