August was a strong month across the equity strategies and a quiet one for income. The All Ordinaries Accumulation Index returned 1.9%, while Endeavor’s Growth Equities portfolio returned 4.0% and High Conviction 2.3%. Balanced Equities returned 1.2%, held back by its larger weighting to the banks and the REITs at a point when the market was paying for resources. The Enhanced Yield strategy returned 0.41%.
Two months into FY27, Growth Equities has returned 5.8%, Balanced Equities 4.1%, High Conviction 1.0% and Enhanced Yield 0.52%, against 3.6% for the All Ordinaries Accumulation Index. August was also the most active month the portfolios have had in some time. We exited South32 and CSL into strength, took the proceeds and built five new positions, and in High Conviction moved cash from 18.7% to 4.1%. Since inception Growth has returned approximately 425%, Balanced 403% and High Conviction 342%, against approximately 276% for the index.
Market Context
August was the month the rotation finally paid. The All Ordinaries Accumulation Index returned 1.9%, but that headline understates what happened beneath it. The Small Ordinaries Accumulation Index returned 5.2% as capital moved down the market capitalisation curve and into the resource names. Gold did most of the work. Spot gold rose around 10% to roughly US$4,456 an ounce after the US Treasury’s bond buyback announcement revived the debasement trade and pushed the US dollar lower, and the ASX gold sector gained almost 34% over the month, lifting its weight in the ASX 200 to around 6.1%. Copper, uranium and lithium followed, and both BHP and South32 touched 52-week highs.
Reporting season did the rest, and it was unusually violent. CSL rose 17% on the day of its result. Generation Development fell 14% on the day of its. Life360 fell sharply on a second quarter that grew revenue 38% but left full year guidance unchanged. The pattern through August was that results were marked against expectations rather than against last year, and in a market that had already priced disappointment into the beaten-up names, the asymmetry favoured the cheap.
Domestically the RBA held the cash rate at 4.35% on 11 August, as the market expected, but the tone was not dovish. Deputy Governor Hauser warned the Bank would raise again if upside risks to inflation crystallised. Against that, July employment unexpectedly fell and the unemployment rate rose to its highest level since late 2021, while volatile oil prices kept the inflation question open. The banks were a drag on the index for most of the month.
Offshore, the MSCI index in Australian dollars returned 0.6%. Semiconductors bounced back from July’s heavy selling and software led on solid earnings, while commodity prices rose broadly. Oil remained volatile on continuing US–Iran skirmishes, with Australian energy stocks running to a four-month high at one point during the month.
August 2026 Newsletters:
Positioning and Outlook
Our portfolios remain concentrated in quality businesses with strong competitive positions, robust balance sheets and the ability to grow earnings through a range of economic conditions. August tested that discipline in both directions, and we acted on it.
We sold two of our largest winners. South32 was exited in full across all three equity portfolios after the shares reached a ten-year high on the back of the Alcoa transaction and a 99% twelve month run. CSL was exited entirely from Growth and halved in Balanced after the stock rose strongly on its FY26 result. CSL bounced more than 80% off its early June lows. Neither decision was about the businesses. Both were about price, and about the fact that a concentrated portfolio has to fund new ideas from somewhere.
The proceeds went into five new holdings. Perpetual was built to 5% across all three equity portfolios through the month. We view PPT, particularly their Corporate Trust business as being undervalued by the market and think that recent Private Equity interest in acquiring the company will provide the catalyst for a further rerating. Austal was built to 4% in Growth and High Conviction. There has been interest from several parties in buying ASB’s US operations which we again see as a catalyst for a higher share price. Elders, Lendlease and Jumbo Interactive were established as smaller positions. We topped up Life 360 and Worley to restore these positions to target weight after both fell post their results. Computershare was exited from Growth and Arena REIT from Balanced.
Cash now sits at 19.1% in Growth and 22.9% in Balanced, both higher than a month ago, and at 4.1% in High Conviction. Weakness in the market in early September has provided us with the opportunity to put some of the cash to work by increasing exposure to some of our holdings.
The outlook question for September is whether the resource-led rally broadens or narrows. Gold miners now make up around 6.1% of the ASX 200 after a 34% month, which is a large bet for a passive investor to be carrying by default. We hold gold exposure through Ramelius and we are comfortable with it, but we are not adding at these levels. The more interesting opportunities are in the domestic names the market has left behind, which is where most of August’s buying went.
Any questions, please give us a call.
The Endeavor Team
Copyright © 2025 Endeavor Asset Management, All rights reserved.
You are receiving this email because you are a client of Endeavor or have expressed interest in our portfolios.
*Note: Performance of the strategy group is representative of individual client portfolios, although performance can differ due to inherent differences between clients portfolios such as initial entry timing, legacy holdings or requested stock exclusions. Performance measured is after fees, taxes and franking credits. Monthly performance figures include an accrual for fees charged quarterly.
