Our preferred domestic cyclical exposures also performed well.<\/p>\n
Stockland (ASX: SGP<\/a>)\u00a0\u2013 a key overweight \u2013 benefited from strong housing demand, leading to earnings upgrades.<\/p>\n Shopping centre REITs, as a second-order beneficiary of resilient consumer spending, saw improving tenant performance and strong re-leasing spreads.<\/p>\n Elsewhere, Iluka (ASX: ILU<\/a>)\u00a0was pleasingly re-rated positively on the back of renewed government support for a non-China rare earths supply chain, and our overweight to gold added further to performance.<\/p>\n The Bad<\/p>\n While the Australian economy continues to perform well and expectations for rate cuts have buoyed consumer and housing names, our limited exposure to discretionary retail \u2014 based on stretched valuations \u2014 detracted from performance. Despite already elevated share prices, positive trading updates at the start of FY26 drove further re-ratings in these names.<\/p>\n Amcor (ASX: AMC<\/a>)\u00a0weighed on returns, with signs of softening demand in the FMCG sector. The US consumer appears to be pulling back on discretionary purchases, and despite Amcor trading on an undemanding multiple, the stock declined by approximately 12%.<\/p>\n Ramsay Health Care (ASX: RHC<\/a>)\u00a0\u2013 a modest overweight \u2013 was a disappointment. While the company showed encouraging signs of rising utilisation and improving funding dynamics \u2014 consistent with our investment thesis \u2014 the renewal of a hospital contract with the WA Government on reduced pricing terms came as a surprise. This development delays the company\u2019s earnings recovery and weighed on performance.<\/p>\n The Ugly<\/p>\n CSL (ASX: CSL<\/a>)\u00a0was a significant underperformer during the month, giving back its recent gains. The company\u2019s results day introduced a flurry of changes, but the key issue in our view was the lack of growth in the June half for its core immunoglobulin franchise. This was a material negative surprise and raised concerns about the competitive dynamics in that segment. Investors didn\u2019t wait for clarity, heading straight for the exits.<\/p>\n Our channel checks suggest some pockets of heightened competition, but overall, the market remains relatively in balance. As such, we believe the sell-off in CSL was an overreaction, and we continue to monitor developments closely.<\/p>\n US housing stocks were also notably weak, with James Hardie (ASX: JHX<\/a>)\u00a0down 25% and Reece (ASX: REH<\/a>)\u00a0(not held) off 18%. This sector has been soft for several quarters, but recent data suggests further deterioration. We began the month with an active position in James Hardie but trimmed ahead of the result on valuation grounds, avoiding the bulk of the drawdown. With the stock down sharply post-result, we\u2019ve paused further selling to re-assess its future prospects.<\/p>\n Investors are positive \u2014 but nervous<\/p>\n Markets are once again trading near all-time highs, buoyed by expectations of improving growth and liquidity as interest rate cuts loom in the coming months. Yet, despite this optimism, the extraordinary volatility observed throughout August suggests a lingering sense of investor trepidation.<\/p>\n This nervousness is perhaps best illustrated by the outsized returns in gold, a traditional safe haven asset, which surged as investors sought protection from uncertainty.<\/p>\n The range of returns across the market was astonishing. As shown in Chart 1, the dispersion raises questions about whether a commonality of quant-driven strategies across the investor landscape may be amplifying price moves.<\/p>\n Chart 1: Ranges of Returns by Super Sector<\/p>\n Source: Tyndall, FactSet.<\/p>\n Reputation means nothing in this market<\/p>\n Investor intolerance for uncertainty was on full display in August, particularly in the treatment of ASX blue chips and recent high-flyers that hit turbulence.<\/p>\n Companies including CSL, James Hardie, and Woolworths \u2014 long considered stalwarts \u2014 were punished harshly. Similarly, high-growth names such as WiseTech (ASX: WTC<\/a>)\u00a0(not held) and Telix (ASX: TLX<\/a>)\u00a0(not held), which have enjoyed strong investor support and share price momentum in recent years, saw aggressive sell-offs.<\/p>\n In each case, poor results or increased uncertainty triggered swift and severe market reactions, as shown in Table 1. In today\u2019s environment, reputation offers no protection \u2014 investors are demanding clarity and punishing ambiguity.<\/p>\n Table 1: August returns for Former Market Darlings and Highflyers<\/p>\n Source: Tyndall, Iress.<\/p>\n In Summary<\/p>\n August was a period of extreme volatility, but the ASX overall benefited from signs of positive momentum in the domestic economy. Our portfolio finished ahead of the market, despite some rough seas along the way.<\/p>\n Importantly, elevated volatility brings opportunity for active investors. Stocks that disappointed were dramatically de-rated \u2014 in some cases excessively given their underlying fundamentals. We continue to actively review these names in search of new opportunities.<\/p>\n![\"Source:](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/09\/c1.png\")
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