Recent research trips to the US and New Zealand highlighted the global reach of the Australian small cap cohort, and yielded vastly different reports on sentiment and fundamentals. The market contrasts underscore the benefits of actively managing an ‘all weather’ bottom-up portfolio comprised of stocks that rank well based on earnings delivery, business sustainability factors and risk measures.

The exponential growth of data centers, particularly in the US, raises questions about meeting evolving electricity needs while addressing the energy trilemma of decarbonisation, reliability and affordability.

US-based electric utilities are pivotal actors in driving the energy transition and play a key role in emerging sectors including datacentres and EV adoption. Over the course of March our investment team met with management teams from ten US utilities with a combined market capitalisation of over US$300bn. These meetings helped reinforce our positive views on the sector and the opportunities available for these critical enablers.

In his latest quarterly review, Chief Investment Officer Garth Rossler compares current markets and portfolio positioning to the period leading up to the GFC, emphasizing our enduring focus on pockets of relative value.

Following the recent gold price surge we believe there is share price upside potential for select companies in the Australian small cap gold sector.

The big Australian banks have enjoyed a good run-up in share prices in recent months. In his latest missive Dougal Maple-Brown, Head of Australian Value Equities, explains why we have favoured some of the Big Four, the drivers behind recent share price rises and what comes next.

Overall, the February reporting season was generally positive for Australian small caps, with the domestic economy remaining resilient, and many small cap company results beating market expectations.

As the Australian tech sector matures, we believe share price performance will be increasingly driven by medium-term earnings delivery, transcending the ‘growth at all costs’, loss-making strategy of recent years.

After a frothy end to 2023 our Head of Australian Value Equities Dougal Maple-Brown assesses the prospects for Australian equities through 2024.