March was a difficult month for equity markets, dominated by the escalation of the US-Israeli conflict with Iran and the effective closure of the Strait of Hormuz.
The All Ordinaries Accumulation Index fell 7.3% for the month. Growth Equities declined 6.1% and has returned +20.1% over the rolling one year. Balanced Equities declined 3.1% and has returned +26.9% over the rolling one year. High Conviction declined 10.4% and has returned +14.2% over the rolling one year. The All Ords Accum. has returned +11.3% over one year.
The Enhanced Yield strategy declined 0.33% for the month. In the context of a 7.3% decline in equities and a 1.7% decline in the All Maturities Bond Index, this was a resilient outcome. The RBA increased the cash rate to 4.10% in March, which will feed through into forward returns for the strategy
Market Context
The conflict in the Middle East dominated global markets in March. The closure of the Strait of Hormuz disrupted approximately 20% of global seaborne oil supply, sending Brent crude above $100 per barrel for the first time in four years. Energy costs surged, bond yields rose and equity markets sold off broadly.
In Australia, the RBA hiked the cash rate by 25 basis points to 4.10% in a split 5-4 decision, the second consecutive increase. Inflation pressures intensified as higher fuel prices fed through to consumer costs. The combination of geopolitical uncertainty and tighter monetary policy weighed heavily on domestic equities, with the damage beneath the surface far worse than the headline index suggested.
The SaaS and software selloff continued from February, with AI disruption concerns triggering broad based selling across technology. Energy producers benefited from the oil price surge while miners exposed to iron ore and base metals faced pressure from demand uncertainty.
March 2026 Newsletters:
Positioning and Outlook
After the significant selloff beneath the surface, we are leaning positively into the opportunity. Many quality businesses are now trading at valuations not seen in years. We are in the process of reducing cash balances and deploying into stocks that have sold off to attractive levels.
Our resource exposures remain well supported by elevated commodity prices. We have used the dislocation to add new positions where the earnings outlook remains intact and valuations have compressed. We also reduced exposure to Australian banks, where elevated valuations, limited earnings growth and increasing mortgage stress from rate hikes present an unfavourable risk reward profile.
For businesses delivering consistent earnings growth, strong cash flow and balance sheet discipline, fundamentals remain the primary driver of long term returns. Periods of market dislocation often create the best opportunities, and we are well positioned to take advantage.
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.
