October 2025

Performance

The month of October 2025 produced a gain of 0.59%. The monthly performance exceeded the benchmark by 0.29%. Overall, the Fund’s rolling annual return is 6.08%. Pleasingly, the Fund has meaningfully outperformed its benchmark, the RBA Cash Rate over the past 1, 3 and 5 years.

Market Insights

Credit markets have in general been very supportive. The portfolio positioning has been pivoting towards a barbell approach. Investments were made in securities rated A+ or better and/or securities rated BBB. This approach is a slight derisking whilst taking advantage of higher yielding securities.

Key Contributors & Detractors

Overall, the portfolio performed over the month. The corporate hybrid portion of the portfolio performed and the market in general remains on the bid. Spread compression has continued. The Fund is opportunistically taking profit, where appropriate, and reinvesting.

Heavily oversubscribed new issues and continuing demand for securities has ensured continued strong performance. New to market issuers have benefitted from strong market conditions and continued strong investor demand. There were moderate levels of issuance in September, and as such buyer fatigue was not an issue.

Outlook & Strategy

In the current environment interest rates are benign, growth is solid, and revenues are sound. Equities can perform and so too credit. In general credit metrics are solid. What we can, and should prepare for, is a little fatigue due to issuance and political noise. Despite some potential volatility in markets, Credit should remain solid based on low default rates, better credit metrics, strong demand and in general low interest rates.