Cadence Opportunities Fund returned a gross performance of -1.9% in June, compared to the All Ordinaries Accumulation Index which was up +1.4% for the month. The fund performed strongly in the second half of the financial year being up 9.1% reversing some of the first half of the financial year underperformance.
For the year ended 30 June 2025 the fund was up +7.9% compared to the All Ordinaries Accumulation Index which was up +13.2%. The All Ordinaries Accumulation Index performance in 2025 was driven by a small number of large capitalisation companies that did not meet Cadence’s investment criteria having low earnings growth and high price earnings (PE) multiples. Commonwealth Bank, Wesfarmers, Westpac, Telstra and Brambles are five such examples which were responsible for around half of the rise in the All Ordinaries Accumulation Index over the 2025 financial year.
The top contributors to performance for Cadence Opportunities Fund during the past financial year were Evolution Mining, Netflix, Echo IQ, Robex Resources, QBE Insurance, Boss Energy, New Gold, Turaco Gold and Guzman Y Gomez. The largest detractors from performance were Step One Clothing, Whitehaven Coal, Alcoa and Capstone Copper.
In multiple past webcasts we have discussed that the AUD gold price had been rising, and that because gold mining companies are leveraged to the gold price their share prices should have outperformed gold price movements. At that point they had underperformed, and this continued for most of 2024. We have recently seen gold company share prices “catch up” to the gold price. For example, over the past twelve months the Evolution Mining share price was up 123% while the Australian Dollar gold price was up 44%. Robex Resources, New Gold and Turaco Gold have also performed well, particularly over the last 6 months.
Price Earnings expansion continued to benefit our Suncorp and QBE investments, which were made a number of years ago when Suncorp and QBE were able to increase premiums in an inflationary environment. A key part of the Cadence process is to follow the trend and while Suncorp, QBE and Netflix may not meet our fundamental criteria and are currently therefore trades, we will only look to sell these positions when their share price trends change.
Echo IQ performed strongly after the company’s technology received FDA approval in October 2024 and they announced an integration agreement with Beth Israel Deaconess Medical Centre, Boston USA. We recently reduced our position for a profit, but since then have participated in the most recent capital raise. Guzman Y Gomez’s share price has been declining since reaching its high of $45 in February 2025. The company is trading at a PE multiple of 232x FY25 earnings and expectations for its US and Australia expansion are high. We took a short position when the share price turned and have added to the position as the trend continued down.
Discount to NTA
CDO is trading at a pre-tax NTA discount of 16%. The current portfolio can be purchased for 84 cents in the dollar. At these discounts the Company will be buying back its own stock in the CDO on-market buy-back program. All CDO Directors added to their CDO shareholdings at a discount to NTA by participating in the recent DRP.
Fund NTA
Fund Performance
Historic Portfolio Exposure
Portfolio Sector Analysis
Portfolio Market Capitalisation Analysis
Franked Dividends Declared
After paying the recent interim dividend the company has around 21 cents per share of profits reserves to pay future dividends.
News
To watch CDO’s March 2025 Quarterly Webcast please click here. In this quarterly webcast, Karl Siegling first gives an update on the Company’s performance, its 6.5c fully franked interim dividend paid, the current composition of the portfolio and its top 20 holdings and then discusses the Company’s discount to NTA. Karl then discusses in some detail six of the fund’s new investments (namely New Gold, Motorcycle Holdings, Boss Energy, Echo IQ, Myer and Betr Entertainment) before closing with an update on the outlook for the rest of the year.
To view all previous Cadence webcasts and interviews please visit the Media Section of the website.
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.
