January marked a constructive start to the calendar year, although performance beneath the surface was increasingly divergent.
The All Ordinaries Accumulation Index rose 1.6% for the month. The Endeavor portfolios delivered varied but resilient outcomes. Growth Equities returned 1.7% for the month and is now up 16.1% for FY26. Balanced Equities rose 3.7% and is up 15.5% for FY26. High Conviction declined 2.0% in January but remains up 19.0% for FY26. The All Ordinaries Accum. is up 6.1% this financial year.
The Enhanced Yield strategy returned 6.6% over the past year compared to the RBA cash rate of 3.85%. In a higher rate environment this strategy benefits directly, and further rate increases would support forward income generation.
Market Context
While commodity strength drove much of the index performance in January, the broader macro backdrop remains supportive for quality industrial businesses. The RBA lifted the Cash Rate to 3.85% in early February, reflecting ongoing inflation pressure but also underlying economic resilience.
The Australian dollar strengthened materially during the month. A firmer currency assists via imported disinflation and reduces the need for materially tighter policy settings. For high quality industrial companies with pricing power and operating leverage, this remains a constructive environment.
Globally, equity returns continued to broaden beyond US mega cap technology. At the same time, valuation sensitivity has re emerged in higher duration and more speculative segments. For businesses delivering consistent earnings growth, strong cash flow and balance sheet discipline, fundamentals remain the primary driver of long term returns.
January 2026 Newsletters:
Positioning and Outlook
Cash levels increased modestly across Growth, Balanced and High Conviction during January, reflecting profit taking where valuation targets were met and a disciplined approach amid rising dispersion.
February has begun more softly, particularly within mid cap and higher duration names on the ASX. At this stage, the weakness appears more positioning driven than earnings led. We expect elevated stock specific volatility through the interim reporting season.
As a quality focused manager, our emphasis remains on businesses with durable competitive advantages, strong balance sheets and clear earnings visibility. Periods of broader market rotation often create opportunities to add to such names at more attractive valuations.
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.
