Performance summary
The CC Sage Capital Absolute Return Fund returned 1.05% in December, outperforming the RBA Cash Rate which returned 0.38%.
The CC Sage Capital Equity Plus Fund returned -2.80% outperforming the S&P/ASX 200 by 0.35% which returned -3.15%.
Contributors and detractors to performance
The strongest contributors to performance were Sage Groups, Global Cyclicals, Yield and Defensives, with the main detractor being Resources.
Performance in Global Cyclicals was driven by underweight positions in Reece (ASX: REH -13%), and James Hardie Industries (ASX: JHX -11%) which was somewhat offset by overweight positions in Orica (ASX: ORI -8%) and Flight Centre (ASX: FLT -5%).
The housing exposed stocks all underperformed the market as US bond yields helped drive mortgage interest rates back up to recent highs while Orica was caught up in the general malaise around the resources sector.
Performance in the Yield Group came from an overweight position in Computershare (ASX: CPU +6%) which benefited from higher US interest rate expectations as well as stronger flows into its corporate trust business, while underweight positions in National Australia Bank (ASX: NAB -5%), Westpac (ASX: WBC -3%) and Commonwealth Bank of Australia (ASX: CBA -3%) added value as they fell harder in a weak market, highlighting that passive index effects can work in both directions.
Defensives benefited from an underweight position in Ramsay Health Care (ASX: RHC -13%) which has been struggling to recoup higher staff and operating costs in prices amongst overcapacity in the hospital sector, while a long position in Auckland Airports (ASX: AIA +10%) outperformed as the stock price bounced sharply following a long anticipated selldown by the Auckland Council.
Resources was again the major drag with overweight positions in South32 (ASX: S32 -9%) and Pilbara Minerals (ASX: PLS -8%) being the major detractors. South32 was weak as alumina prices retreated from their recent spectacular run despite WA government approvals to favourably modify environmental conditions at its Worsley alumina mine. Meanwhile Pilbara was weak on general negativity and China, electric vehicle penetration and the lithium price. These were somewhat offset by an overweight position in beaten down energy stocks such as Karoon Energy (ASX: KAR +5%) and Santos (ASX: STO +1%) which bounced through the month, and an underweight position in Liontown Resources (ASX: LTR -28%) which also fell on weak lithium sentiment.
Read the Outlook for 2025 or the monthly reports for additional commentary.
Read the monthly reports for additional commentary.
* Past performance is not indicative of future performance. ^ Sage Capital uses a custom grouping system for long short positions (Defensives, Domestic Cyclicals, Global Cyclicals, Gold, Growth, REITs, Resources and Yield). With a focus on the principal macro earnings drivers for each stock, Sage Groups allow for comparisons to GICS for selecting stocks within a sector.
This information is for wholesale and professional investors only and has been prepared by Sage Capital Pty Ltd ACN 632 839 877 AR No. 001276472 (‘Sage Capital’). Channel Investment Management Limited ACN 163 234 240 AFSL 439007 (‘CIML’) is the responsible entity and issuer of units in the CC Sage Capital Equity Plus Fund ARSN 634 148 913 and the CC Sage Capital Absolute Return Fund ARSN 634 149 287 (collectively ‘the Funds’). Channel Capital Pty Ltd ACN 162 591 568 AR No. 001274413 (‘Channel’) provides investment infrastructure services for Sage Capital and is the holding company of CIML. This information is supplied on the following conditions which are expressly accepted and agreed to by each interested party (‘Recipient’).
This information contains general financial product advice only and has been prepared without taking into account the objectives, financial situation or needs of any particular person. It is intended solely for wholesale clients (including sophisticated investors) as defined under sections 761G and 761GA of the Corporations Act 2001 (Cth).
The information provided should not be considered personal advice, a recommendation, or an offer to invest in the Funds. Recipients should not rely on this information in making investment decisions. A Recipient should, before making any investment decisions, consider the appropriateness of the information, and seek professional advice.
Neither Sage Capital, Channel, CIML or their representatives and respective employees or officers (collectively, ‘the Beneficiaries’) make any representation or warranty, express or implied, as to accuracy, reliability or completeness of this information or subsequently provided to the Recipient or its advisers by any of the Beneficiaries, including, without limitation, any historical financial information, the estimates and projections and any other financial information derived there from, and nothing contained in this information is, or shall be relied upon, as a promise or representation, whether as to the past or the future. All investments contain risk. Past performance is not a reliable indicator of future performance.
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