FY25 closed on a high note. For June, the ASX All Ords Accumulation Index returned 1.4% and the equity portfolios between 2.8% and 2.9%. For the quarter, the benchmark returned 9.5% and the Balanced, Growth and High Conviction portfolios 12.7%, 14.7% and 15.8%.
This year, volatility once again proved to be an opportunity. Despite tariff noise, middle east headlines and some softer consumer data, the portfolios have increased 20-24% from the April low, above the ASX Accumulation Index’s 14%.
April 25 saw the third sharp market sell off in five years after the 2020 covid crash and rate hike sell off in 2022. Patient buyers who stick to the strategy and think long term continue to be rewarded.
Over the past 12 months, the Growth and Balanced portfolios slightly underperformed their benchmarks, largely due to not holding CBA. We believe CBA’s valuation reached bubble territory, and signs of this have started to unwind in early July. The High Conviction strategy returned 14.4% for FY25. The Enhanced Yield Portfolio delivered a solid 6.5% for FY25.
The Economy
The Australian economy remains in reasonable shape. The RBA considered a 50bp rate cut at its last meeting – a signal that there is more policy support to come. Quarterly GDP growth came in at 0.2%, CPI has eased to 2.1% p.a., unemployment is steady, and discretionary spending slightly softer. We’re in an okay spot, with monetary policy likely to stay accommodative.
In the US, the One Big Beautiful Bill moved closer to law. It locks in a near term strategy of running the USA economy hot via deficit spending, while pressuring the Fed to keep rates lower than they arguably should be. Globally, most central banks are shifting toward easing as inflation moderates.
We expect global policy to be clearer by year end, and we’re confident the portfolio is well positioned for the economic environment over the next 6-12 months.
June Newsletters
Outlook
Looking ahead we see a supportive policy mix and a clear path to earnings growth. Markets price an 85% chance of a 25bp RBA cut in early July and at least two Fed cuts before year end; most major central banks are leaning the same way while the US fiscal package keeps the government stimulus alive.
Earnings expectations have reset, valuations across our holdings remain reasonable and tariff uncertainty will continue to fade. With 5-10% cash on hand we stand ready to add to quality growers, capital light compounders and mispriced cyclicals as August reporting season unfolds. We enter FY26 positioned for opportunity and confident about future returns.
Regards
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.
