Cadence Opportunities Fund returned a gross performance of +0.1% in July compared to the All Ordinaries Accumulation Index which was up +3.8% for the month. The top contributors to performance during July were Resolute Mining, Sierra Rutile, Regal Partners, Austin Engineering and Evolution Mining. The largest detractors from performance were Alcoa, Capstone Copper, Netflix and Meta Platforms.
Resolute Mining’s share price was up 25% during the month. This was partially due to a 5% increase in the gold price, as well as continued good operational performance with the company producing 91 koz of gold in the 2nd quarter, up 19% compared to the previous quarter. In our recent quarterly webcasts, we have also spoken about how the share price of gold companies has failed to match the performance of gold itself, even though gold companies are leveraged to the gold price. We believe that part of Resolute Mining’s good performance in July is the share price essentially playing ‘catch up’ on the gold price increases that we have seen over the past year.
While the Australian market was up overall in July there were some areas of weakness. The aluminium and copper prices were both down during the month which impacted our investments in Alcoa and Capstone Copper. The market appears undecided on whether the selloff in Copper and Aluminium indicates a world economic slowdown, and overall change in trend, or rather a temporary correction in a long-term trend. Our cash levels increased during July which had a negative impact on July performance but have been beneficial during August after global stock markets fell significantly due to concerns about an economic slowdown in the U.S.
Discount to NTA and On-Market Buy-Back
At the time of writing this newsletter, CDO is trading at a pre-tax NTA discount of around 10%. CDO has implemented an on-market buy-back to buy back the shares it has issued under the DRP. This buy-back will operate whilst the CDO share price is trading at a discount to the Pre-Tax NTA.
Fund NTA
Fund Performance
Historic Portfolio Exposure
Portfolio Sector Analysis
Portfolio Market Capitalisation Analysis
Franked Dividends Declared
The Company has around 22.5 cents per share of profits reserves to pay future dividends.
News
Over the coming weeks we will be releasing the year-end webcast. To watch CDO’s March 2024 Quarterly Webcast please click here. In this quarterly webcast, Karl Siegling first provides an update on the Company’s performance, the 6.5c fully franked interim dividend recently paid and the composition of the portfolio. Karl Siegling and Chris Garrard then discuss four of the Company’s current investments (Capstone Copper, Beach Energy, Cooper Energy and Origin Energy) and finish off with the outlook for the rest of the year.
To view all previous Cadence webcasts and interviews please visit the Media Section of the website.
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