February was a mixed month across equity markets, with domestic market strength masking a sharp selloff in global software names.
The All Ordinaries Accumulation Index rose 3.3% for the month and is up 9.6% for the financial year. The Endeavor portfolios delivered divergent outcomes. Growth Equities declined 4.0% for the month and is now up 11.5% for FY26. Balanced Equities increased 0.7% and is up 16.3% for FY26. High Conviction declined 7.4% and is up 10.1% for FY26.
The Enhanced Yield strategy increased 0.44%. In a higher rate environment this strategy benefits directly, and further rate increases support forward returns.
Market Context
Domestic reporting season delivered broadly solid results, with strength in banks, resources and select consumer names supporting the broader market. However, performance beneath the surface was volatile, with mid cap and higher duration names under pressure.
Globally, the sharp selloff in software accelerated. Growing concerns around AI disruption to traditional software business models triggered broad based selling, with high quality companies declining alongside weaker peers. The headline indices understated the severity beneath the surface. Commodity markets remained supportive, with metals and energy prices firming, which benefited resource exposed markets such as Australia.
The inflation backdrop remains a key consideration. The RBA is expected to tighten further in the near term, which puts additional pressure on rate sensitive sectors but also underscores underlying economic resilience. A firmer Australian dollar assists via imported disinflation, though the net effect on corporate earnings remains mixed.
February 2026 Newsletters:
Positioning and Outlook
Cash levels remain appropriate across all three portfolios, reflecting a disciplined approach amid rising dispersion and elevated volatility.
Even though it was a weak month for performance, reporting season reinforced the earnings quality across our holdings. Our positions in banks, resources and select consumer names continue to demonstrate competitive strength and pricing power, which should support earnings through the current rate cycle.
Resource exposures remain well supported by firm commodity prices and steady demand signals. The selloff in global technology has created compelling opportunities in high quality names where valuations have reset materially. We have used this dislocation to add positions we believe offer attractive upside over the next 12 to 24 months.
For businesses delivering consistent earnings growth, strong cash flow and balance sheet discipline, fundamentals remain the primary driver of long term returns. Periods of broader market dislocation often create the best opportunities, and we are well positioned to take advantage as they arise.
The Endeavor Team
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*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.
