Proven performance, disciplined approach: Three years of the Maple-Brown Abbott Australian Small Companies Fund

As the Maple-Brown Abbott Australian Small Companies Fund (the Fund) marks its third anniversary, it has gained recognition as a differentiated and competitive small-cap strategy within the Australian equity landscape. Since its inception in June 2022, the Fund has consistently delivered a compelling combination of strong absolute returns, meaningful alpha generation, exceptional risk-adjusted performance, and resilient capital preservation across varied market conditions. This track record highlights the effectiveness of the Fund’s disciplined, earnings-focused investment philosophy and its commitment to delivering sustainable long-term value for investors.

Compelling return and risk profile: Delivering more than just alpha

Since its inception on 24 June 2022, the Fund has delivered an impressive, annualised net return of 21.2%, more than doubling the performance of its benchmark, the S&P/ASX Small Ordinaries Total Return Index, which returned 9.4% over the same period. This material outperformance has been sustained across multiple time horizons, including a standout 12-month return of 26.3%, versus 12.3% for the benchmark—underscoring the Fund’s ability to consistently generate strong, repeatable returns through varying market conditions.

Fund performance over different time periods

Source: MBA, data since inception (24 June 2022) to 30 June 2025. *Since inception 24 June 2022. ^Benchmark is the S&P/ASX Small Ordinaries (Total Return) Index. Performance is based on the movement in net asset value per unit plus distributions and is before tax and after all fees and charges. Imputation and foreign income tax offsets are not included in the performance figures. Past performance is not a reliable indicator of future performance.

Importantly, these strong returns have not been accompanied by elevated risk. On the contrary, the Fund has exhibited a compelling risk-adjusted profile, with annualised volatility of just 13.4% since inception—significantly below the benchmark’s 15.5%. This lower volatility, combined with consistent outperformance, has translated into superior risk-adjusted performance metrics, reinforcing the Fund’s suitability for investors seeking both capital growth and stability within their small-cap allocation.

Fund performance and risk characteristics (% p.a.) since inception

Performance since inception (% pa)

Volatility since inception (% pa)

Source: MBA, data since inception (24 June 2022) to 30 June 2025. Benchmark is the S&P/ASX Small Ordinaries (Total Return) Index. Performance is based on the movement in net asset value per unit plus distributions and is before tax and after all fees and charges. Imputation and foreign income tax offsets are not included in the performance figures. Past performance is not a reliable indicator of future performance.

The Fund’s upside and downside capture ratios further illustrate its strength across market environments. With an upside capture ratio of 106%, the Fund has fully participated in, and often exceeded, market gains during rising periods. More impressively, its downside capture ratio of just 51% highlights its ability to preserve capital during market drawdowns—effectively halving the losses experienced by the benchmark in declining markets. This asymmetric performance—strong participation in up markets coupled with significant protection in down markets—is a hallmark of the Fund’s rigorous investment process.

Monthly success rates (%) and upside/downside capture ratios (%) since inception

Success rate – relative monthly return hit rate (%)

Capture ratios – upside and downside (%)

Source: MBA, data since inception (24 June 2022) to 30 June 2025. Benchmark is the S&P/ASX Small Ordinaries (Total Return) Index. Performance is based on the movement in net asset value per unit plus distributions and is before tax and after all fees and charges. Imputation and foreign income tax offsets are not included in the performance figures. Past performance is not a reliable indicator of future performance.

Further analysis highlights the Fund’s consistency and resilience during periods of market stress. In months when the broader Australian small-cap market declined, the Fund posted an average monthly return of -1.6%, significantly outperforming the benchmark’s -3.2%—demonstrating effective downside mitigation. Conversely, during rising markets, the Fund delivered an average monthly gain of 4.1%, marginally above the benchmark performance of 3.9%. This ability to outperform in challenging environments and keep up in favourable environments reflects the strength of the Fund’s investment process and its capacity to generate positive relative returns through most phases of the market cycle.

Average monthly performance (%) in rising and declining markets

Average monthly performance (%) – rising markets

Average monthly performance (%) – declining markets

Source: MBA, data since inception (24 June 2022) to 30 June 2025. Benchmark is the S&P/ASX Small Ordinaries (Total Return) Index. Performance is based on the movement in net asset value per unit plus distributions and is before tax and after all fees and charges. Imputation and foreign income tax offsets are not included in the performance figures. Past performance is not a reliable indicator of future performance.

Compared to the median Australian small-cap manager, the Fund has delivered substantially higher absolute returns while maintaining lower absolute volatility—a clear reflection of its return-driven philosophy and disciplined risk management framework. This strong performance underscores the effectiveness of the Fund’s process in balancing alpha generation with capital preservation.

Fund performance (% p.a.) and risk (% p.a.) characteristics relative to the benchmark and peers

Source: Morningstar Direct, MBA, data since inception (1 July 2022) to 30 May 2025. Benchmark is the S&P/ASX Small Ordinaries (Total Return) Index. The Fund’s primary investment objective is to outperform the benchmark, after fees, over a five-year period, The secondary investment objective is for the Fund’s performance to have a lower absolute volatility as compared to the benchmark, over a five-year period. The median Australian Small Caps Manager is calculated using all Australian Small Cap managers within the Morningstar Institutional Survey. Performance is based on the composite performance and is before tax, fees and charges. Past performance is not a reliable indicator of future performance.

Investment edge: sustainable competitive advantages

This compelling return and risk profile is underpinned by a disciplined, earnings-focused investment process that blends deep fundamental research with strong earnings, sustainability, and active risk management focus. The result is a high-conviction fund designed to capture upside potential while remaining resilient through market volatility—a powerful combination for long-term investors seeking consistent outperformance with reduced downside risk.

The Fund’s competitive edge is driven by several core advantages:

1. Earnings-focused investment philosophy

At the heart of the strategy lies the conviction that earnings ultimately drive share prices. The team focuses on companies with clear visibility into medium-term earnings delivery, offering a consistent and repeatable foundation for alpha generation across market cycles.

2. Style-agnostic, high-conviction approach

Unconstrained by style labels such as growth or value, the Fund is style agnostic, enabling the team to pursue the most compelling bottom-up idiosyncratic opportunities for both industrial and resource exposed companies. The Fund is benchmark-unaware, typically comprising 30–50 high-conviction positions, with alpha driven by stock-specific insights rather than macro trends or thematics.

3. Integrated and proprietary sustainability framework

Sustainability is fully embedded within the investment process—not treated as a separate overlay. The Fund’s framework includes in-house fundamental and ESG inputs systematically assessing both internal and external risks and opportunities, enhancing the durability of returns and helping to avoid companies with unsustainable business models.

4. Proprietary research and non-consensus insights

Along with an exhaustive company meeting schedule, the team leverages a rich suite of proprietary and alternative data sources, including anonymised debit and credit card data, website traffic analytics, forensic accounting techniques, and industry expert networks. This enables early identification of earnings inflection points and the development of non-consensus investment theses.

5. Rigorous risk management at both the stock and fund level

A structured and quantitative risk framework incorporates liquidity, earnings volatility, and downside risk into portfolio construction and position sizing. This approach enables effective capital allocation and helps avoid risk concentrations—supporting the Fund’s strong downside capture ratio since inception.

6. Proven track record of outperformance with lower volatility

Since inception, the Fund has delivered 21.2% p.a.—more than double the benchmark’s 9.4%—while maintaining lower volatility (13.4% vs 15.5%). This combination of strong absolute returns and capital preservation has resulted in exceptional risk-adjusted performance.

7. Deeply experienced and aligned investment team

The Fund is managed by Co-Portfolio Managers Phillip Hudak and Matt Griffin, who have close to 40 years combined investment experience. They are supported by a team of dedicated fundamental and ESG analysts. Their collaborative investment culture, deep market knowledge, and disciplined execution are central to the Fund’s success.

The Bottom line: A compelling investment proposition

The Fund applies a disciplined, earnings-driven investment philosophy, targeting undervalued small-cap companies with strong medium-term earnings potential and sustainable business models. Its rigorous bottom-up process integrates fundamental research, proprietary sustainability analysis, and stock-specific risk assessment to construct a high-conviction, benchmark-unaware fund.

This approach is compelling because it combines strong alpha generation with effective downside protection—a testament to the strategy’s ability to generate consistent, risk-adjusted outperformance across market cycles.

In conclusion, we would like to sincerely thank our clients and partners for your continued support and for enabling our success.

Disclaimer
This information 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 Small Companies Fund (ARSN 658 552 688) (‘Fund’). This information 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. These 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 1300 097 995. This information is current as of 10 July 2025 and is subject to change at any time without notice. © 2025 Maple-Brown Abbott Limited