The Market Matters Emerging Companies Portfolio targets small & mid capitalisation emerging stocks (ex-100) that show strong underlying growth characteristics – Click here to view
Another tough week for the Emerging Companies Portfolio and while the small caps across the market have been hit, this portfolio holds a number of technology focussed companies with a tilt towards payments that have really felt the brunt of this recent weakness. Over the course of the week the portfolio fell -7.10% while cash sits at a little over 1%. This financial year the portfolio has now underperformed, down -9.89% versus the Small Ords that have fallen around 4%. Since inception, the portfolio has increased by 10.30%pa outpacing its benchmark, but it is marginally below our 12% pa return objective. While it’s important to stress that smaller, emerging companies are a lot more volatile than large caps, we’re still disappointed with the recent performance of the portfolio – we have some work to do.
This week saw some big moves in stocks driven by below par results. Adore Beauty (ABY) -24% continued its poor run of form, and while they met sales targets, margins are the issue. The same was true for wealth platform Praemium (PPS) which fell by 25% while both Zip Co (Z1P) -20% and Tyro (TYR) -33% reported significantly higher losses than the market had expected. Today we’ll focus on Zip in a little more detail than normal.
