July brought a firmer start to FY27 across most of our strategies. The All Ordinaries Accumulation Index rose 1.7% in the month, while Endeavor’s Balanced Equities portfolio returned +2.9% and Growth Equities +1.8%. Enhanced Yield delivered +0.11%, a little under the RBA cash rate of 0.36% and the giveback we flagged after June’s outsized 1.21%. High Conviction returned -1.2%, with two positions accounting for the bulk of the shortfall in a month that was otherwise kind to the portfolio’s largest holdings.
Over the rolling 12 months, Growth Equities has returned +1.6% net of fees, Balanced Equities +13.9%, High Conviction -10.6% and Enhanced Yield +5.72%, against a benchmark return of +4.8%. It has been a difficult year for our more concentrated strategies, and we are not going to dress that up. Since inception, however, Growth has returned 405%, Balanced 397% and High Conviction 333% against 269% for the index, and the businesses we own are, on the whole, larger and better capitalised than they were a year ago.
Market Context
July was another rotation month on the ASX, and a more constructive one than June. Healthcare extended its recovery and the banks held their ground, while gold producers, technology and the broader mining complex were sold through the final fortnight. Iron ore struggled to hold US$100 a tonne as China’s July manufacturing PMI fell to 49.2 from 50.3, with steel output still running below last year.
The domestic inflation picture improved. The June quarter figures released on 29 July showed headline inflation easing to 3.8% from 4.0%, while the trimmed mean held at 3.6%, below the RBA’s own 3.7% forecast, helped by automotive fuel prices falling for a third consecutive month. Markets priced out an August increase almost entirely, and the RBA duly held the cash rate at 4.35% on 11 August in a unanimous decision, its second consecutive hold after three hikes in the first half of the year. The weaker Australian dollar continues to work in favour of the offshore earners in the portfolios.
Offshore was less settled. The Federal Reserve held at 3.50–3.75% on 29 July in a 9–3 vote and gave nothing away on the path ahead, with futures moving to price a hike as soon as September. Long-dated US yields pushed back above 5%, which weighed on global bond markets and on our fixed income exposures, and the Nasdaq fell 3.2% for a second consecutive monthly decline as semiconductors were sold hard and attention shifted from AI demand to AI monetisation. Brent was volatile again, rallying on renewed tension around the Strait of Hormuz before easing on ceasefire hopes into month end.
July 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. July was a more active month than most, and deliberately so.
Four new positions were added across the equity strategies: TechnologyOne, Light & Wonder, Breville and Ramelius Resources. Each was bought well below where it traded a year ago, and in Ramelius’ case into a sector-wide pullback rather than a company-specific one. We exited Firefly Metals from Growth, Peet and Dyno Nobel from Balanced, and Airtasker, Cedar Woods, Peet and Credit Clear from High Conviction. Positions that had run hard, including ZIP and BHP, were trimmed. Cash was reduced in Growth from 21.7% to 16.8% and in High Conviction from 26.2% to 18.7%, while Balanced lifted cash to 18.7% after taking profits, leaving that portfolio with capacity to act.
In June we flagged two tests for the second half. The first has passed: the RBA is on the sidelines and the hike the market had been pricing has been priced out, which removes a headwind for both the equity strategies and the Yield portfolio. The second, August reporting season, is now underway. With the discount rate settled, the burden of the next move sits squarely with earnings, and reporting season will reward companies with pricing power and resilient volumes. That is precisely where the portfolios are positioned.
Iron ore below US$100 and a soft Chinese PMI keep the pressure on the resource names. We continue to see that pullback as opportunity rather than risk, and remain confident that a disciplined focus on fundamentals will drive long term returns.
Any questions, please give us a call.
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.
