Cadence Opportunities Fund returned a negative performance of 3.9% in December, compared to the All Ordinaries Accumulation Index which was down 3.3% for the month. Year to date the fund is up 1.9%, compared to the All Ordinaries Accumulation Index which is up 9.6% for the same period. The largest detractors from performance during the month were Renascor Resources, Syrah Resources, Citi Chic Collective, Coronado Global Resources and Tietto Minerals. The top contributors to performance were Novonix, Arafura Rare Earths, Melbana Energy, Tourism Holdings Rentals and Stanmore Resources.
Markets declined through December following the gains recorded in the previous two months, continuing the pattern of volatility seen through much of 2022. This month saw defensive and large-cap style companies outperforming while technology and EV battery metal related stocks were sold off. As such, the fund’s holdings across graphite related companies such as Syrah Resources and Renascor Resources detracted from performance in December however have contributed positively to returns in recent months.
A further downgrade from City Chic Collective also impacted performance despite the company trading at a discount to its net working capital. On the other hand, coal equities recovered through the month in line with the coal price and the re-opening of the Chinese economy continued to gain traction. The fund has added to its positions in Health & Happiness, A2 Milk, Tencent and Alibaba as these share prices recover from depressed levels.
There is also beginning to be more corporate activity in markets, and more specifically mergers. Tourism Holdings completed its merger with Apollo Tourism and started trading on the ASX as a combined entity recently. We believe this merger will deliver significant value for shareholders through industry consolidation and improved pricing power. The same goes for the recent proposed merger between Genesis Minerals and St Barbara which could create the next mid-tier gold producer in Western Australia’s Leonora region.
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Karl Siegling has recently been interviewed on the following shows:
- Andrew Geoghagen interviewed Karl Siegling on Ausbiz 16 Dec 2022 (Click here to watch)
- Andrew Geoghagen interviewed Karl Siegling on Ausbiz 9 Dec 2022 (Click here to watch)
- Andrew Geoghagen interviewed Karl Siegling on Ausbiz 2 Dec 2022 (Click here to watch)
To view all previous Cadence webcasts and interviews please visit the Media Section of the website.
Cadence Opportunities Fund held its AGM and Investor Briefing on the 16 November 2022. Karl Siegling started the Investor Briefing by giving an update on the performance of the funds, discussed the changes in the portfolio and talked about some important changes in market trends. Karl Siegling, Jackson Aldridge and Charlie Gray then discussed a number of current long and short positions in the funds. Karl Siegling closed with the outlook for 2023. Click here to view this Investor Briefing.
We encourage you to visit our 52 books you should read before buying your next stock page on our website. We have compiled a list of books/ documentaries that have influenced our investment style or helped provide insight into the investment process.
