Heading into 2026
The proportion of ASX300 stocks with upward earnings revisions is at a five-year high, highlighting the broad strength in the market. The US economy is expected to see stronger growth in the first half of CY2026 as the benefits from increased investment and tax cuts flow through. US Fed rate cuts are expected to provide further tailwinds to the fiscal stimulus. Australia should also benefit from a strengthening private sector and resilient labour market.
We continue to invest in high-quality companies that are global leaders in their niche that can sustainably compound their earnings at above market growth rates over the medium to long term. We take a bottom up research approach driven by extensive company and industry contact to deepen our understanding of the companies we invest in and where earnings prospects may be under-appreciated by the market.
Over the long term we believe earnings delivery drives company share prices, so investing in quality companies delivering sustainable compound earnings growth is what will drive attractive returns for our portfolios over the medium and long term.
To achieve superior returns, we need to own stocks with superior earnings growth. The portfolio continues to hold stocks that on average have double digit earnings growth. Our portfolios are also higher quality, as measured by Return on Equity (ROE). This higher portfolio ROE comes despite much lower levels of debt, with portfolio gearing (as reflected by debt/equity) significantly lower than the ASX300.