The Company performance for the month of April was 1.1% (after fees), underperforming the S&P/ASX Small Ordinaries Accumulation Index by 0.7%.
Overall Commentary
Company Facts
| Name | value |
|---|---|
| Investment Manager | Spheria Asset Mangement Pty Limited |
| ASX Code | SEC |
| Share Price | $2.240 |
| Inception Date | 30 November 2017 |
| Listing Date | 5 December 2017 |
| Benchmark | S&P / ASX Small Ordinaries Accumulation Index |
| Dividends Paid | Quarterly |
| Management Fee | 1.00% (plus GST) per annum1 |
| Performance Fee | 20% (plus GST) of the Portfolio's outperformance2 |
| Market Capitalisation | $134.0m |
1 Calculated daily and paid at the end of each month in arrears.
2 Against the Benchmark over each 6-month period subject to a high-water mark mechanism.
Performance
1 Calculated as the Company’s investment portfolio performance after fees excluding tax on realised and unrealised gains/losses and other earnings, and after company expenses.
2 Benchmark is the S&P/ASX Small Ordinaries Accumulation Index.
3 Inception date is 30th November 2017. Past performance is not a reliable indicator of future performance. All p.a. returns are annualised.
Markets
The positive monthly return sharply contrasts with the overall sentiment of the month, which saw small-cap equities fall by over 8% before a significant recovery pushed them into positive territory. The sharp selloff driven by President Trump announcing significant tariffs across most trading partners, initially ranging from a baseline of 10% to 50% on all US imports. Whilst increased tariffs were expected, they were materially larger and more widespread than expected causing markets to fear the possibility of a global recession. As the market unraveled Trump quickly stepped in announcing a 90-day pause on tariffs for non-retaliating countries (except for China where the tariff rate was increased to 145%) and a willingness to negotiate terms seeing the S&P500 rebound ~9% in one day. Despite markets recovering there remains uncertainty regarding the future of trade policies and companies have already begun to reflect this in their outlook. Travel companies FLT.ASX and CTD.ASX are examples of this with both companies downgrading their earnings last week, driven by slowing growth in the US. We expect this theme to continue over the coming months as corporates attempt to navigate the changing environment.
As discussed in recent commentaries, M&A continues to remain a theme across small caps with the portfolio benefiting from this during the month as Abacus Storage King (ASK.ASX) received a non-binding indicative proposal at a 27% premium to the undisturbed price and Ainsworth Game Technology received a binding bid from Novomatic to acquire the remaining 47.1% stake it does not currently own at a 35% premium to the last undisturbed price.
Over the month the largest contributors were owning Ainsworth Game Technology (AGI.ASX, +20%), an overweight position in Abacus Storage King (ASK.ASX, +26%), and an overweight position in Eagers Automotive (APE.ASX, +23%). The largest detractors from performance included an overweight position in Fletcher Building (FBU.ASX, -5%), not owning De Grey Mining (DEG.ASX, +15%), and owning NZME (NZM.ASX, -9%).
Net Tangible Assets (NTA)1
Pre-Tax NTA2
$2.406
Post-Tax NTA3
$2.341
The NTA values shown above are after the dividend of 3.5 cents per share payable on 15 May 2025. The ex-date of the dividend was 24 April 2025.
1 NTA calculations exclude Deferred Tax Assets relating to capitalised issue cost related balances and income tax losses.
2 Pre-tax NTA includes tax on realised gains/losses and other earnings, but excludes any provisions for tax on unrealised gains/losses.
3 Post-tax NTA includes tax on realised and unrealised gains/losses and other earnings.
Top 10 Holdings
Source: Spheria Asset Management
Market Cap Bands
Source: Spheria Asset Management
Fund Ratings
Further Information
For more information, please contact Pinnacle Investment Management Limited
on 1300 010 311 or email distribution@pinnacleinvestment.com
Disclaimer
Spheria Asset Management Pty Ltd (‘Spheria’) (ABN 42 611 081 326), a Corporate Authorised Representative (No. 1240979) of Pinnacle Investment Management Limited (‘Pinnacle’) (ABN 66 109 659 109, AFSL 322140), is the investment manager of Spheria Emerging Companies Limited (‘SEC’ or the ‘Company’) (ABN 84 621 402 588). While SEC and Spheria believe the information contained in this communication is based on reliable information, no warranty is given as to its accuracy and persons relying on this information do so at their own risk. Subject to any liability which cannot be excluded under the relevant laws, Spheria and SEC disclaim all liability to any person relying on the information contained in this communication in respect of any loss or damage (including consequential loss or damage), however caused, which may be suffered or arise directly or indirectly in respect of such information. Any opinions and forecasts reflect the judgment and assumptions of Spheria and its representatives on the basis of information at the date of publication and may later change without notice. Disclosure contained in this communication is for general information only and was prepared for multiple distribution. The information is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. The information in this communication has been prepared without taking account of any person’s objectives, financial situation or needs. Persons considering action on the basis of information in this communication are to contact their financial adviser for individual advice in the light of their particular circumstances. Past performance is not a reliable indicator of future performance. Unless otherwise specified, all amounts are in Australian Dollars (AUD). Unauthorised use, copying, distribution, replication, posting, transmitting, publication, display, or reproduction in whole or in part of the information contained in this communication is prohibited without obtaining prior written permission from SEC and Spheria.
Zenith Disclaimer: The Zenith Investment Partners (ABN 27 103 132 672, AFS Licence 226872) (“Zenith”) rating (assigned February 2024) referred to in this piece is limited to “General Advice” (s766B Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual, including target markets of financial products, where applicable, and is subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Past performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessments and at Fund Research Regulatory Guidelines.
Lonsec Disclaimer: The rating issued (Spheria Emerging Companies Limited rating issued October 2024) is published by Lonsec Research Pty Ltd (‘Lonsec’) (ABN 11 151 658 561, AFSL 421 445). Ratings are general advice only, and have been prepared without taking account of your objectives, financial situation or needs. Consider your personal circumstances, read the product disclosure statement and seek independent financial advice before investing. The rating is not a recommendation to purchase, sell or hold any product. Past performance information is not indicative of future performance. Ratings are subject to change without notice and Lonsec assumes no obligation to update. Lonsec uses objective criteria and receives a fee from the Fund Manager. Visit lonsec.com.au for ratings information and to access the full report. © 2022 Lonsec. All rights reserved.
