Quarterly Newsletter – Accepting The Risks And Buying The Best When Quality Is On Sale

Welcome to Auscap’s April 2026 Accepting The Risks And Buying The Best When Quality Is On Sale.

Markets have a strong tendency to swing from one extreme to another. As Howard Marks has often commented, the pendulum of market sentiment swings from greed to fear spending very little time at fair value. Following strong equities market returns in recent years a confluence of events, including primarily developments in artificial intelligence and conflict in the Middle East, has led to a repricing of many securities in recent months, particularly in mid and small capitalisation companies. The mood has changed from optimism to extreme pessimism and this is being reflected in valuations. The question is whether, thinking objectively and behaving rationally in the face of the new information, this is creating opportunities for the patient investor.

In this newsletter we also detail the performance and portfolio positioning of the Auscap Funds in March 2026.

Learnings Outcomes: After reading this newsletter, readers should understand recent shifts in market sentiment, the factors driving the divergence between large‑cap and smaller‑cap Australian equities, and the implications of emerging risks such as artificial intelligence and geopolitical conflict. Readers should gain insight into how periods of market dislocation can create opportunities for disciplined, long‑term investors.

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.