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Spheria Emerging Companies Limited (ASX:SEC)

ACN 621 402 588

Overall Commentary

The Company performance for the month of May was -2.7% (after fees), underperforming the S&P/ASX Small Ordinaries Accumulation Index by 2.6%.

The recurring “flight to safety” thematic drove another leg up in extremely expensive names. Anything cyclical / out-of-favour generally became even more so in May. The bifurcation was perhaps exacerbated by transition selling in the small and micro-cap space as two of our competitors were closed during the month. Nevertheless, it was a difficult month for the fund as several holdings downgraded their earnings expectations including Michael Hill International (MHJ.ASX) and Ainsworth Game Technology (AGI.ASX). Unfortunately, positive movements in the share prices of Supply Network (SNL.ASX), Vista Group International (VGL.ASX) and Star Entertainment Group (SGR.ASX) failed to make up for the aforementioned factors.

In our opinion, the Australian economy is experiencing “recession like” conditions which though negative for company profits in the short term could paradoxically precipitate an easing of monetary policy in the not-too-distant future. Given the market tends to price in advance of such shifts, we believe there is currently an attractive window to buy cyclically exposed companies that in many cases are plumbing multi-year lows and, in some cases, all-time lows.

Company Facts

Name value
Investment Manager Spheria Asset Mangement Pty Limited
Share Price $2.160
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 $129.2m

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.


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.

Net Tangible Assets (NTA)1

Pre-Tax NTA2


Post-Tax NTA3


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


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 September 2023) 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 for ratings information and to access the full report. © 2022 Lonsec. All rights reserved.