Investor Insights

At the end of 2021, Ernst and Young in an annual paper exploring the private debt market in Australia estimated its size to be AU$133 billion and growing 21 per cent year on year.

Montgomery Investment Management (Montgomery), through its partnership with Australian Eagle, is pleased to announce retail investors can now access the Australian Eagle Trust, Long Short Fund. The Australian Eagle Trust, Long Short Fund (The Fund) is an open-ended, Australian-registered managed investment scheme with a minimum investment of $20,000.

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price. ”1 This well-worn adage from Warren Buffett has guided our investment approach for over thirty years and is the title of a piece we published in 2018. 2 Given recent market conditions, we’ve chosen to revisit this concept.

Having not long finished the festive season and commenced a new year, many of us take the moments shortly after to reflect on the year that was, and also consider what we would like to see in the year ahead. With that in mind I thought I would take a look back at 2022.

  In this week’s video insight Gary and David discuss how the reopening of China is having a positive impact on the resources sector, specifically copper. The Montgomery Small Companies Fund is currently overweight industrial metals and Gary shares three stocks we like in this space as well as three lithium producers that we think have bright prospects.

The conclusion of the Term Funding Facility and conclusion of the Federal Government Coronavirus SME Guarantee Scheme means approximately $9 billion1 of SME credit will require refinancing by Australian non-bank lenders over 2023 and 2024. Recent Trends in SME Credit Commencing in 2014, growth in ADIs (typically referred to as ‘banks’) lending to SME businesses plateaued considerably.

This week, the December 2022 quarterly Consumer Price Index (CPI) reported the fourth consecutive quarter to show a rise greater than any seen since the introduction of GST in 2000. With the persistent inflationary pressure not yet showing any signs of slowing, further RBA rate rises are certainly on the cards.

2022 was a challenging year in the market, particularly for growth stocks, and now we enter 2023 with the consensus expectation for a recession. Portfolio activity for the Polen Capital Global Growth Fund picked up during the fourth quarter of the year. Four long-term holdings were sold during the December 2022 quarter – Nike, Adidas, Starbucks, and Meta Platforms.

The share price of Australia’s leading gold miner, Newcrest Mining (ASX:NCM), has been somewhat disappointing for the last few years. That could soon change if the recent recovery of gold price continues, recent corporate actions start to bear fruit and if investors start to take note of the company’s significant copper assets.

In this week’s video insight David takes a closer look at IMDEX’s (ASX:IMD) acquisition of Devico AS.  The strategic combination expands the product suite and client footprint offers extended market presence in key mining regions as well as cross-selling opportunities for IMD’s integrated solutions, with the global number one position in each of Rock Knowledge Sensors, Drilling Optimisation Products and Real-Time Data and Analytics.

The fourth quarter of 2022 echoed themes that endured throughout the year, and despite posting double-digit returns over the quarter, 2022 ended with the largest annual decline since 2008. While multiple compression was behind the broad decline over the year, the fourth quarter saw multiples expand for the first time since Q4 2021.

While the market experienced some recovery during the fourth quarter, the speed of the market decline and the aggregate losses as of year-end made 2022 one of the most challenging years for the market in many years. Portfolio performance The fourth quarter was notable for being the only one to post positive returns in 2022.