In October, the HNW Australian Equity Portfolio had a better month, gaining +0.93% ahead of the benchmark’s return of 0.36% in what proved to be a pretty volatile month. Gold continued to grind upwards, finishing at US$4,011/oz, though with some 5% falls throughout the month. The key news over the month was the “hot” inflation print in late October that has almost certainly taken a Melbourne Cup Day rate cut off the table. The September quarter CPI number of 3.2% was the highest since June 2024, driven by a 9% increase in electricity prices, which was significantly influenced by the end of state electricity subsidies. This saw the share prices of retailers sold off sharply despite many, such as JB Hi-Fi and Wesfarmers, posting positive sales results for the Q3 2025 at their AGMs.
Over the month, positions in Mineral Resources (+18%), ANZ (+10%), Whitehaven Coal (+9%), Woodside (+8%), and Transurban (+5%) added value, with the common theme being better-than-expected quarterly updates released over the month. ANZ was the standout among the banks in October, with the market reacting very positively to new CEO Matos’ plans to cut costs and maintain the dividend, despite many analysts expecting a cut. On the negative side of the ledger, positions in CSL (-10%), JB Hi-Fi (-10%), and Lotteries (-7%) hurt performance, with the latter two names getting caught up in the retail sector sell-off. As detailed in the CSL AGM note sent out mid-month, the biotherapy company’s share price was weaker due to lower US flu vaccine sales and delays in Chinese purchases of albumin. These are not company-specific issues, as competitors such as Takeda report identical issues. Cash balances built over the month to 3.5% with dividend inflows, and the HNW IC is taking a more cautious stance with the ASX 200 close to all-time highs.
In October, the HNW Australian Equities Income Focus Portfolio gained 1.0%, outperforming the blended benchmark return of 0.47%. Over the month, positions in ANZ (+10%), Whitehaven Coal (+9%), Woodside (+8%), Transurban (+5%) and Dyno Nobel (+4%)added value. On the negative side, performance was hurt by JB Hi-Fi (-10%), Lotteries (-7%) and Arena REIT (-6%).
As discussed above, JBH was caught up in the broad-based sell-down for retailers, despite giving a surprisingly strong quarterly update in October. Q1 FY2026 saw Australian sales increase by +6% despite cycling a very strong quarter last year – the impact of new iPhones, artificial intelligence-powered computers, and wearable technology such as the Oura Ring and Meta’s AI-powered Ray-Ban glasses.
As expected, there was no income declared in October, which is typically a slow period, although this will change in November.
Full reports to follow shortly.
