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DIVIDEND YIELD1
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1. Dividend yield is based on current displayed share price, and the most recently declared dividend, annualised
2. Grossed up yield is based on current displayed share price, the most recently declared dividend, annualised, and the tax rate and franking percentage applicable for the most recently declared dividend
SUMMARY
- The portfolio declined 3.0% in August, as style-driven market moves and a handful of company updates weighed on results.
- Global equities rose modestly, with Materials leading on higher commodity prices, while Technology shares trailed on concerns over the cost of AI infrastructure.
- A new investment was made in Delta Electronics, a Taiwanese leader in advanced power supply systems for data centres, telecommunications, and consumer electronics.
COMMENTARY
Market Commentary
Global share markets posted modest gains in August, though results varied across regions and sectors. Materials stocks were the strongest performers, supported by higher commodity prices, while Technology shares lagged as investors weighed concerns over the rising costs of AI infrastructure. Value-oriented companies continued to outperform, reflecting a rotation in markets toward more attractively priced businesses.
Japan was one of the better-performing regions, helped by a new trade agreement with the United States that lifted confidence in its growth outlook. Europe also advanced, supported by improving sentiment and stronger activity across both manufacturing and services. In contrast, emerging markets were softer. Indian equities fell following new US tariffs, while South Korea and Taiwan declined, given their heavy exposure to large AI companies. In China, retail sales and trade data came in below expectations, adding to concerns around domestic demand.
Broader economic conditions remained supportive. Inflation continued to moderate across most regions, with the US Federal Reserve striking a more cautious tone at its annual meeting in Jackson Hole. Consumer demand in the US stayed resilient, with retail sales moderating but still healthy in real terms. These developments encouraged a constructive backdrop for equity markets, even as shifts in style and sector leadership influenced monthly results.
Portfolio Commentary
The portfolio declined in August, reflecting a period where style-driven market moves and select company updates weighed on results. Businesses that issued more cautious outlooks or faced heightened competition faced short-term share price weakness, even where long-term prospects remain intact.
The Trade Desk, a leading digital advertising platform, was the largest detractor. Shares fell sharply after management provided cautious revenue guidance and highlighted competition from Amazon’s advertising platform. While this unsettled the market, the company remains well positioned to benefit over the long term as advertising spend increasingly moves to independent platforms outside the largest online players.
During the month, the portfolio initiated an investment in Delta Electronics, a Taiwanese company that holds a leading position in advanced power supplies for data centres, telecommunications equipment, and consumer electronics. With a diversified global supply chain and opportunities to expand into areas such as electric vehicles and industrial automation, Delta offers strong growth potential.
Elsewhere, Atkore declined after announcing its CEO will retire at year-end, alongside continued weakness in the PVC pipe market. In Health Care, Chugai Pharmaceutical traded lower after trial results for its weight-loss drug fell short of investor expectations, while Vertex Pharmaceuticals weakened following disappointing trial data for a new pain treatment.
Sony was a bright spot during the month, delivering solid results supported by strength in its gaming and image sensors businesses. The company continues to be well positioned to benefit from rising global demand for entertainment content and advanced technology.
The investment team also continued its engagement with portfolio companies on key environmental, social, and governance (ESG) topics. In the second quarter of 2025, discussions included UnitedHealth Group on regulatory compliance processes, which ultimately led to the decision to exit the position, and Symrise on the potential impact of US tariffs on its cosmetics ingredients division. These conversations form part of the team’s ongoing focus on how companies manage long-term risks and create sustainable value.
While August was a challenging month, the portfolio remains focused on high-quality companies with durable advantages and strong long-term growth drivers. The team continues to apply a disciplined, bottom-up approach, adding selectively to businesses with clear earnings visibility, while remaining mindful of near-term market rotations.
PIA’s Proposed Portfolio Enhancements
A recent webinar, held on 4 September 2025, and presented by PIA Chairman Frank Gooch, Pengana Credit CEO Nehemiah Richardson, and Pengana Capital Group CEO Russel Pillemer, explored PIA’s proposal to enhance future shareholder returns with diversified exposure to highly sought-after global private credit – an initiative designed to strengthen diversification and deliver more reliable, and increased, fully-franked income.
You can access the webinar in full below or navigate directly to the key discussion points here.
The Board believes that, if approved, the benefits will include:
We strongly encourage all shareholders to vote at the upcoming AGM to be held on 21 October 2025. Further details of the meeting will be provided to shareholders in the Notice of Meeting, which will be dispatched to shareholders on 19 September 2025.