Quarterly Newsletter – Will A Focus On Short Term Results Benefit Long Term Performance?

Welcome to Auscap’s July 2025 Newsletter titled Will A Focus On Short Term Results Benefit Long Term Performance?

Much is being made of the fact that the vast majority of active fund managers are underweight Commonwealth Bank of Australia (CBA). Its strong performance in recent years has led to widespread active management underperformance because it represents over 10% of the All Ordinaries Index. Should this positioning be criticised or encouraged? Is it sensible for investors to have over 10% of their domestic equities portfolios invested in a large domestic retail bank, or are fund managers acting rationally in being less exposed to this one company than the broader market? In this newsletter we discuss this as well as detail the performance and portfolio positioning of the Auscap Funds in June 2025.

Learnings Outcomes: The key learning objective of the Auscap Newsletter for July 2025 is to understand what drives long-term investment returns and the importance of consistently applying a sound investment process rather than focusing on short-term index-relative performance outcomes.

This activity meets the guidelines for qualifying CPD, and has been accredited for continuing professional development by the Financial Advice Association of Australia but does not constitute FAA’s endorsement of the activity. 0.5hr CPD is available for this activity.