How the portfolios performed over the September 2025 quarter

Vinva Global Alpha Extension continued to add value to the Partners Medium Term and Long Term Portfolios during the September quarter, outperforming the broader global share market. The strategy identifies opportunities using data-driven analysis and a range of investment signals that assess company fundamentals, market behaviour, and valuation trends. During the period, these signals worked well, particularly those favouring attractively priced companies, financially strong businesses, and firms with improving market positioning. The portfolio also benefited from exposure to companies linked to precious metals and other resources, which performed strongly as gold attracted renewed investor interest as a safe haven amid rising geopolitical tensions and shifting global growth expectations.

Yarra Enhanced Income delivered a strong quarter and contributed to returns across the Partners Multi-Asset Income and Medium Term Portfolios. The strategy invests primarily in high-quality Australian credit securities, such as corporate bonds and hybrid instruments, aiming to provide investors with a steady income stream and moderate capital growth. Performance was supported by tightening credit spreads — the additional yield investors receive for holding corporate bonds instead of holding government bonds — as confidence in corporate balance sheets remained strong. Demand for Australian corporate debt was robust, and new issuance from local issuers provided opportunities to enhance portfolio yield while maintaining a disciplined approach to risk.

The quarter proved challenging for Evidentia Quality Core, reflecting both stock-specific and broader style-driven headwinds that created a relative drag on the Partners Multi-Asset Income, Medium Term, and Long Term Portfolios. The portfolio’s underweight position in the banking sector, maintained on valuation grounds, together with larger holdings in high-quality growth businesses such as CSL and James Hardie, weighed on results after these companies fell short of market expectations. More broadly, many other quality-focused Australian share managers also underperformed the benchmark during the period, as valuation discipline — a hallmark of the style — led them to trim outperforming positions too early in a market driven by momentum and valuation expansion. While short-term returns have been pressured, the longer-term record of consistent alpha generation across quality strategies suggests the recent softness is more cyclical than structural.

Aoris International experienced a difficult period, creating a relative performance drag on the Partners Medium Term and Long Term Portfolios. Weakness was concentrated across information technology and business services holdings, where investor concerns around the potential impact of artificial intelligence on established business models weighed on sentiment. The managers remain confident in the long-term fundamentals of these businesses and their ability to adapt to technological change. Offsetting this, strength in select technology hardware and industrial exposures provided partial support. The portfolio also added new positions in areas benefiting from structural growth trends, including enterprise software and global travel.