Quarterly Letter – September 2022

Dear Investor,

Ongoing concerns around persistent inflation and hawkish Central Banks drove another round of equity market volatility in the September quarter. This is not new news. The same themes have been plaguing markets since the start of the calendar year. Nevertheless, it seems that investors are now increasingly concerned that ongoing monetary policy tightening will result in a recession in the near term.

The Australian market, as measured by the S&P/ASX 300 Accumulation was one of the few global exchanges to finish the quarter higher, closing up 0.5%. Domestic small and mid-cap stocks were mixed. The S&P/ASX Mid-cap 50 Accumulation Index was up 5.2%, while the S&P/ASX Small Ordinaries Accumulation Index was 0.5% lower for the three months ended 30 September. It is interesting to highlight the poor performance of Small Industrials Index, which has been a feature of calendar 2022. In fact, over the past year, the Small Industrials segment of the market has declined by 27.5%.