What if one of Australia’s biggest growth stocks lost more than half its value, while a bank once considered cheap nearly tripled? In our latest video, Dougal Maple-Brown unpacks one of the most striking valuation reversals in recent Australian market history and explains how our valuation-driven approach positioned portfolios to benefit.
Transcript
Our portfolios performed very well in the first quarter of 2026. In addition to our overweight to Energy, part of the reason for this was the ongoing de-rating of many of the high-flying growth stocks. A bit like what’s happening to many of the software names, both here and in the US.
I have previously shown a chart of some of these de-ratings. Today I want to put this in more tangible terms by comparing the market capitalisation of two top 10 stocks: ANZ and CSL.
When COVID struck in the beginning of 2020, CSL was the biggest stock in our equity market with a market capitalisation of over $150bn. As I have previously highlighted, at the time it was trading on very rich valuations: for example, a Price : Earnings ratio (or P/E) of almost 50x.
Contrast this to ANZ Bank: the smallest of the Big Four trading banks. In March 2020, ANZ had a market cap of just $40bn and was trading on very inexpensive multiples: approximately 10x P/E and less than book value.
Not surprisingly, at that time our portfolios held zero CSL and plenty of ANZ. In fact, in market cap terms, one CSL was the equivalent of almost four ANZ’s!
Fast forward to today, and it is hard to believe the difference. Today ANZ has a market cap approaching $120bn (up threefold) whilst CSL’s is below $70bn (more than halved). So, it is not far off where ANZ almost buys two CSL’s!
Now, when the valuations change, we change our positioning. We had no CSL back in 2020 but today it is a modest overweight position.
We still hold ANZ, but frankly that is more a reflection on how expensive the other three of the Big Four (so CBA, WBC & NAB) are trading.
So, valuation matters. And when valuations change, we change our position accordingly.
Disclaimer
This video is prepared and issued by Maple-Brown Abbott Limited ABN 73 001 208 564, AFSL 237296 (‘MBA’) as the Responsible Entity of the MBA Australian Value Opportunities Fund (ARSN 091 138 233) (‘Fund’) and the MBA Australian Share Fund – Wholesale (ARSN 087 294 504) (‘Fund’). This video contains general information only, and does not take into account your investment objectives, financial situation or specific needs. Before making any investment decision, you should seek independent financial advice. This document does not constitute an offer or solicitation by anyone in any jurisdiction. Past performance is not a reliable indicator of future performance. Neither MBA, nor any of its related parties, directors or employees, make any representation or give any guarantee as to the return of capital, performance, any specific rate of return, or the taxation consequences of, any investment.
Any views expressed on individual stocks or other investments, or any forecasts or estimates, are not a recommendation to buy, sell or hold, they are point in time views and may be based on certain assumptions and qualifications not set out in part or in full in this document. Individual stocks referred to may or may not be currently held by the Fund. Information derived from sources is believed to be accurate, however such information has not been independently verified and may be subject to assumptions and qualifications not described in this document. To the extent permitted by law, neither MBA, nor any of its related parties, directors or employees, make any representation or warranty as to the accuracy, completeness, reasonableness or reliability of this information, or accept liability or responsibility for any losses, whether direct, indirect or consequential, relating to, or arising from, the use or reliance on this information. Before making a decision whether to acquire, or to continue to hold an investment in the Fund, investors should obtain and consider the current PDS and Target Market Determination (TMD) or any other relevant disclosure document. For the Fund, the PDS, AIB and TMD are available at maple-brownabbott.com/document-library or by calling T +61 2 8059 7671. This information is current as of 2 April and is subject to change at any time without notice. © 2026 Maple-Brown Abbott Limited.
Dougal joined Maple-Brown Abbott in 2001 as an equity analyst. He is currently a portfolio manager and equities analyst. Dougal was an Executive Director from July 2009 to October 2018. Dougal’s responsibilities include equity analysis and portfolio management, including managing a large number of institutional and retail accounts. He attended the Advanced Management Program at Harvard Business School in 2014. Prior to joining Maple-Brown Abbott Dougal worked in a national law firm and at an international investment bank.
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