• Bal Start: $1,151,759

• Bought None

• Sold: None

• Bal End: $1,158,824

• Cash: $117,207

Overnight Markets

Overnight markets were mixed with the S&P500 up +0.41% while the Nasdaq slightly fell -0.09%. Small caps were the biggest outperformer as the Russell 2000 rose +1.45%. Brent Oil fell after Israel and Lebanon agreed to a ceasefire. In terms of sector performance, Healthcare staged a recovery, jumping +3.16%, followed by Financials +2.68% and Communications +2.12%. The leading laggard was IT (-1.43%) led by a -12% drop in Broadcom. According to Politico, the oil industry warned the US Government that inventory buffers are diminishing, meaning global energy prices could surge. ASX 200 futures are up.

Australian Market

The ASX finished down (-0.70%) in a very soft session, led by Materials (-2.31%) while Healthcare was strangely the champion of the day (+3.54%). However, all eyes were on Megaport today, coming off its trading halt after announcing a capital raise to expand their services, it jumped 20% on open before settling down to +11.26% by EOD. In the construction sector, Monadelphous (MND) had a minor selloff (-0.62%) despite securing a $380m construction contract with CS Energy for the Brigalow Peaking Power Plant. This is following the similarly large contract SRG secured not long ago. With energy security being a key concern at the moment, infrastructure companies are seeing increased demand for their services. In other news, the ABS released our March quarter accounts. GDP grew 0.3% in the quarter, 2.5% you. This missed market expectations in both instances. According to Westpac, 75% of the growth came from data centre construction.

Portfolio Commentary

MP1 was the star of the portfolio today, jumping +11.26%. We trimmed the position once again and recycled the capital into BVS (+2.17%) and initiated on SYL (Symal Group). It was a bit of a mixed day, not all technology positions were up, similar to gold names. OBM (-3.76%) and C79 (-4.18%) continue to disappoint while PC2 ticks up in defiance (+0.80%). Meanwhile CCL (+1.64%) is our quiet achiever.

Investment Activity

Initiate on Symal Group (SYL):

Symal is a diversified vertically integrated civil construction and engineering business. The company operates across various areas of construction to diversify their revenue mix and insulates them from single sector cyclicality. Revenue grew 20.7% in its recent financials, with a $1.64bn work-in-hand pipeline.

Business units include:

• Symal, the core civil contracting arm.

• Unyte, the fleet and equipment logistics. They lease the assets as well as use them for their own projects.

• Sycle, Sells materials by recycling construction and demolition waste.

• Wamarra (49% owned), An Aboriginal-owned and operated civil contractor for minor civil works.

• Searo, newly acquired, specializing in electrical, energy transmission and storage.

From a valuation perspective, the stock trades at an EV/EBITDA multiple of 7.1x and a P/E multiple of 13.2x. For reference MND trades on 25x earnings. This is a significant discount to peers. EBITDA margins are ~10% which is higher than both MND and SHA. Morningstar quant screen also indicates SYL is undervalued, with a Fair Value price of $3.

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Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

• Bal Start: $1,155,575

• Bought None

• Sold: None

• Bal End: $1,151,759

• Cash: $143,012

Overnight Markets

Markets fell overnight due to fresh clashes between the US and Iran. Futures indicate both Australia and Asian markets are set to fall on their respective opens. Oil, as expected, rises (+2.41%) on higher middle east tensions while Gold (-1.23%) and Copper (-2.88%) fall. The US House of Reps voted to stop the war in Iran with Republicans breaking rank as the mid-terms approach. More AI Bubble talk is entering the conversation as the hyperscalers look to raise capital for DC buildouts (even Megaport in Australia), and eyewatering valuations for the IPOs of SpaceX, Anthropic and OpenAI.

Australian Market

The ASX 200 ended the day down -1.13%. The market was risk-off following the US amid the re-escalation of Middle East tensions. To make matters worse US crude inventories are at a one-year low, sparking renewed fears of supply disruptions. Materials and the Gold index fell -3.19% and -3.12% respectively. Information Technology (-1.87%) and Telecommunication (-2.21%) were similarly sold off. Defensive sectors Utilities (+1.33%) and Consumer Staples (+1.03%) were the bright spots of green in an otherwise red day.

Portfolio Commentary

While the benchmark fell -1.14%, the portfolio was surprisingly resilient, only falling -0.33%. The largest detractor today was the growth side of the portfolio. All the tech names like XRO (-4.2%), Life360 (-4.0%), and Zip (-3.7%) were down. Meanwhile, Megaport remained flat, still on their trading halt. The exposure to industrial and retail stocks protected the portfolio today; specialist office out-fitter SHAPE was the leader of the pack (+5.1%), followed by Cobram Estate and JB Hi-Fi gaining +2.0% and +3.6% respectively. Perhaps a sign that consumer discretionary is coming back into focus? Doubtful. SRG gained an additional +1.6%, continuing the momentum after the contract win.

Investment Activity

None

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Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

• Bal Start: $1,169,211

• Bought None

• Sold: None

• Bal End: $1,155,575

• Cash: $143,012

Overnight Markets

Global market indices finished higher on their respective closes. Gold (+0.11%) and oil (+1.30%) prices were also higher on close. Small caps stock led the rally with the Russell 2000 +0.90%, and all but four sectors posted gains. Utilities (+1.93%) and Materials (+1.16%) outperforming the rest. SpaceX IPO is expected to make many staff millionaires. Many have engaged with wealth management firms for better pricing for services. Interestingly, Chinese lab-grown diamonds are apparently beneficiaries of the AI boom. Diamonds are great heat conductors, making them good for cooling semiconductors. US JOLTS (Job Opening and Labor Turnover Survey), increased by 731,000 to 7.62m vs 6.88m consensus. This means the number of unfilled jobs is greater than the workers available to fill them. Could be a leading indicator of inflationary fears. The Fed is unlikely to cut rates as a result.

Australian Market

ASX futures were up this morning, after a strong US session. The ASX 200 did indeed end the day up on the back of Materials and Energy sectors performance well ahead of the other sectors. Uranium stocks also rallied higher following news out of the US that the administration has committed to a multi-billion dollar nuclear energy deal. Technology as a sector was the weakest, falling -0.76%. As the portfolio is vastly overweight Technology, compared to the benchmark, our performance suffered today.

Portfolio Commentary

360 provided an update to the Evercore TMT Conference. Advertising revenue is expected to double and MAU (monthly active users) trending back on their target growth. The stock fell -2.2% today. MP1 announces a $827m capital raise to fund an AI infra build. It is offering $14.30 per unit, a 13.9% discount. The stock price is still under a trading halt. We will have to wait for the market response. WTC also dipped -2.1% while XRO had an even steeper -3.5% hit. Retail stocks bore the brunt of the session, with Lovisa falling dumping -7.0%, driven by the wage hike yesterday. JB Hi-Fi also slid -3.0%. Conversely, engineering champion SRG Global offered some green shoots, climbing +2.5% to extend its momentum from yesterday. HMC added +1.4% and Coles added +1.1%

Investment Activity

None.

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Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

• Bal Start: $1,159,845

• Bought None

• Sold: None

• Bal End: $1,169,211

• Cash: $143,012

Author Note

We skipped our usual daily market wrap on Friday, May 29, 2026, to write the comprehensive monthly wrap-up instead. The numbers speak for themselves with portfolio generating a +7.13% return for May, outperforming the benchmark and broader market.

Pleasingly, our focus on technology and high-conviction mining services paid off, and the majority of returns were driven by stock selection. Today's session proved exactly why that strategy works, as a massive domestic regulatory shock created total chaos on the index level while our holdings, the diamonds in the rough, quietly perform.

Overnight Markets

Major US benchmarks pressed ahead to hit fresh record highs, despite slightly negative market breadth as only the Technology and Energy sectors finished in the green. Nvidia launched its new RTX Spark PC superchip, which sparked a powerful wave of momentum across chip and software stocks while successfully offsetting a sharp 6% intraday spike in oil prices. US factory activity hit a four-year high with the US ISM Manufacturing PMI jumping to 54 on a robust new-orders surge of 56.8, feeding into hawkish central bank concerns. The ASX 200 futures pointing to a flat-to-negative open for the local market.

Australian Market

The ASX 200 staged a good recovery after an early slump. Sentiment was challenged as the market digested blanket coverage of the Fair Work Commission’s 4.75% minimum wage hike for 2.8 million workers. The retail sector didn’t like this news as it presses on already thin retail margins.

Local tech caught the AI tailwinds from the US to post market-saving gains. These were led by WTC (+7.9%), Xero (+7.5%) and 360 (+13.3%). All of which we own in the portfolio. Ultimately, the activity today helped absorb the retail shock.

Portfolio Commentary

The portfolio was up today driven by gains from SRG (+16.6%) after booking $1.85b worth of contracts. Life360 rallied +13.3% from US tailwinds and subscription momentum. Large tech companies WTC and XRO had good gains of +7.9% and +7.5%, respectively. There is robust institutional demand for scalable corporate software. On the down side JBH fell -5.4% on fears of higher labor costs. Meanwhile OBM fell -2.5% despite the gold index gaining. BVS jumped +3.3%, pleasing to see as a new entrant in the portfolio.

Investment Activity

None.

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Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

Since inception, the fund has generated a Net Return of 14.16%. This is an alpha of 11.9% above the ASX300 Accumulation Index’s 2.3% return.

The portfolio continued to capture alpha through active management. Being overweight Technology (26.1%) vs the Benchmark weight (2.3%) significantly added to performance.

Active Implementation

We made improvements to the attribution calculation since last month. Previously sector returns each day were not accurately smoothed for the daily return of the portfolio. So when compounded, the trading effect increases over the month.

This has been corrected. Now the daily contribution of stocks is scaled to the daily return of the portfolio, and then smoothed using the Carino Smoothing Method.

In May, the Buy & Hold Active Return was 5.73% (Allocation + Selection + Interaction), with the Benchmark returning 1.25%. The Residual Effect was calculated as 0.16%. Statistically insignificant. Below are the previous performance months restated using the new methodology:

The new method is mathematically sound, proven by the low residual and that the portfolio returns match the percentage change in the portfolio dollar value each month.

Portfolio Attribution

Reviewing the Brinson Factor Attribution tables reveals that returns are coming from stock selection.

The most significant move remains the heavy overweight in Technology (26.1% vs. 2.3%), which contributed 2.7% to the portfolio. Pleasingly the Interaction Effect for Technology was significantly positive (1.9%). This indicates we picked the right stocks and overweighted the sector well.

Two other significant contributors to performance were Financials and Industrials. Both provided meaningful returns to the portfolio, as see through the Selection Effect

Once again, avoiding Healthcare entirely generated +0.6% Allocation Effect and +0.5% in Selection Effect.

The single position in Energy (WDS) was a detractor from the portfolio but at such a low weight the impact was minimal.

An average Cash position of 14.8% created a minor -0.2% Allocation drag. We deployed more capital in the month and trimmed a few positions to take profit.

Portfolio Characteristics & Risk Metrics

The portfolio’s metrics are as expected. The current profile favours the mid-cap sweet spot, with the majority of companies between $1Bn to $5Bn in market cap.

The portfolio liquidity is well within risk parameters. Considering a 30% Average Daily Volume (ADV), the portfolio has a Days to Exit of 5 days. This is due to the small FUM size.

Other statistics included the following:

• Weighted Avg Mkt Cap: $4,170m, smaller than the $ 9,799m of the ASX300.

• WA Beta (1Y): 1.11, indicating a portfolio is slightly more sensitive to the market.

• WA P/E Ratio: 23.5x, higher than the ASX300 20.3x trailing PE. Portfolio is more expensive given the holdings are on the growthy side.

At the end of the month, the largest overweight was Technology (+25.4% ) while the Financials (-17.6%) was again the largest underweight.

Despite the underweight to Financials, our stock selection in the sector was a positive contributor to performance.

Key Contributors & Detractors

The NAV increased 7.13% during May. The specific positions that drove the return by contribution were:

• Megaport (MP1): Largest holding at 8.2%, returning 61.8%. Contributing 5.1%

• SKS Technologies (SKS): A 3.6% position returning 46.8%. Contributing 1.7%

• Judo Capital (JDO): A 4.0% position returning 19.1%. Contributing 0.8%

• HMC Capital (HMC): A 2.2% position returned 31.2%. This could have been a higher weight in the portfolio.

Key detractors were:

• Wisetech (WTC): A 4.2%, fell -27.3%. Detracting -1.1%

• Xero (XRO): A 4.7%, fell -20.3%. Detracting -1.0%

• Chrysos Corp (C79): A 2.9%, fell -22.0%. Detracting -0.6%

Not all technology stocks were beneficiaries of the AI and Data Centre theme. Software continued to sell-off. WTC and XRO, as our incumbent large cap software stock, keep getting caught in the crossfire.

Meanwhile, C79 detracted as the gold price continued to fall. The market is expecting a resolution to the US/Iran conflict. It just a questions of “when?”. In the interim, gold and oil are negatively correlated at the moment. As oil rises, gold sinks. And gold has been sinking more than expected.

There is still a healthy allocation to gold through PC2 and OBM. In anticipation of C79 not performing as well as expected, the position was trimmed over the month.

Outlook & Strategy

The 14.2% absolute return since inception is fantastic. We are incredibly pleased with the performance of the portfolio and the current stock holdings.

The focus for the coming month will be strategically deploying dry powder on opportunities as well as trimming successful candidates like MP1, who continue to rally passed a 12% weight in the portfolio.

Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

• Bal Start: $1,124,832

• Bought SHA, GLF

• Sold: None

• Bal End: $1,111,217

• Cash: $131,785

Market Commentary

Despite the waxing and waning news coming from the US/Iran negotiations, the US market ended their session slightly up (SP500 +0.02%). Meanwhile many other indices were down as well as WTI (-4.89%), copper (-0.95%) and gold (-1.21%). Unsurprisingly, Energy was the lead laggard (-1.52%). Interestingly, despite the risk-off sentiment Consumer Discretionary was the top performing sector (+1.89%). The IEL released a report stating that global oil demand would contract by 420,000 b/d in 2026. 1.3 million b/d less than pre-war estimates. At the same time, global supply declined by 1.8mb/d in April. Some interesting stock news: Salesforce Q1 FY27 revenue was up 13%, Snowflake Q1 FY27 product revenue up 34%, Braze Q1 FY27 revenue up 30%. ASX futures are down, indicating a soft day.

What a horrible session. The ASX 200 wiped out all of its gains from yesterday. A combination of escalating US-Iran military conflicts in the Middle East, rising bond yields, and hawkish commentary from Federal Reserve Governor Lisa Cook completely shattered the optimism. Materials (-2.43%) suffered the brunt of the sell-off, with the Gold Index dropping -7.40%. Staples (+0.25%) and Discretionary (+0.15%) were the only positive sectors. Luckily we had BVS, HMC, and CBO as our top portfolio defenders.

Portfolio Commentary

SHA announced it will acquire APS (Australian Professional Shopfitters). APS outfits retail outlets. This business integrates well with SHA’s business (office fitouts) without cannibalising the core business. Most of APS’ projects are valued at less than $500k. SHA will acquire 100% of APS for $20.4 in upfront cash (17.4m cash + 3m scrip) plus $9m in contingent consideration, paid over two years subject to performance hurdles.

GLF released record FY25 revenue and margins. Average home prices increased 18.4%. They have a 10+ year development pipeline. GLF reconfirmed its FY26 Guidance of Underlying EPS of 28.5c to 30.0c.

Investment Activity

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Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

• Bal Start: $1,105,624

• Bought None

• Sold: MP1

• Bal End: $1,124,832

• Cash: $147,191

Market Commentary

Wall Street pushed through the geopolitical tensions, sending the S&P 500 (+0.61%) and Nasdaq (+1.19%) to record highs. Semiconductors rallied while bond yields declined and oil dropped lower. Micron jumped +19.2% which now joins the trillion-dollar market cap club. The ASX 200 futures are somewhat flat with some economic releases expected today.

The ASX 200 made a solid recovery, closing +0.50% higher. The rally was led by the Tech sector (+1.70%) following the lead from the U.S. Consumer Discretionary (+1.37%) and Real Estate (+1.34%) also gained a bid on cooling global inflation pressures. Headline CPI up 4.2%, down from 4.6% in March and below market expectations of 4.4%. Trimmed mean inflation edged up to 3.4% from 3.3% but in-line with consensus, with automotive fuel excluded in both months. Financials slid -0.14% with the most notable detractor being ASX Ltd (-8.49%), reeling from multi-year cost expansion guidance.

Portfolio Commentary

The portfolio is performing strongly due to the large overweight to Technology. The portfolio should be on track to post a 4-5% performance month. MP1 jumped +8.56% with the rest of the tech sector. We pared back the position by 1% as it climbed above a 12% weight of the portfolio . Similarly SKS climbed +6.42% as more capital flowed into data centres. CBO also rose +2.93%. On the down side, GDG fell -2.41% followed by SHA (-2.20%). 360 was flat despite having their target price raised $33 by Bell Potter (implied 74% gain).

Investment Activity

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Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

• Bal Start: $1,106,974

• Bought None

• Sold: None

• Bal End: $1,105,624

• Cash: $136,056

Market Commentary

As mentioned yesterday, US markets were closed. However, other global markets were open and it was positive overnight. Indices in Canada (+1.04%), Hong Kong (+0.86%), Germany (+2.01%), India (+1.42%), Japan (+2.87%) and the UK (+0.22%) were all up. Oil continues to track lower, Brent is now at $93 per barrel, while gold is showing signs of a recovery (+1.16%) now priced at $4,569/toz. While details of the US/Iran deal are trickling into our news feeds, the market waits on tender hooks for a deal to be finalised. ASX futures indicate the Australia market is set to rise.

The ASX 200 closed lower (-0.39%) following a quiet Monday night. Geopolitical tensions reignited after US military strikes on missile sites in southern Iran clouded peace deal prospects. We saw trimming across the board. Materials (+0.15%) was the only sector to finish in the green, as copper plays like South32 (+4.8%) and Sandfire Resources (+2.3%) rallying on the back of commodity price rises. Utilities was the greatest laggard (-2.17%)

Portfolio Commentary

The portfolio was more defensive than the benchmark, only falling -0.12% vs -0.38%.

CCL was the best performer on the day with a +3.18% jump. HMC also gained +2.49% alongside MP1 which rebounded +1.92% as investors rotated into data centre infrastructure. On the flip side, SHA was the heaviest detractor, falling -3.32% as investors taking profit. NWL slid -2.85%, along with WTC (-2.57%) as growth technology stocks were dragged down. Meanwhile, C79 and OBM ended slightly down following the gold price down. Unfortunately our newest entry into the portfolio, BVS, has had a rough start, falling -2.6%.

Investment Activity

None.

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Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

• Bal Start: $1,091,811

• Bought BVS

• Sold: WDS

• Bal End: $1,106,974

• Cash: $136,056

Market Commentary

Over the weekend, Kevin Warsh was officially sworn in as the next Chair of the Federal Reserve. The market will be watching him closely at the next meeting. US/Iran negotiations are presumably near an end according to communications from the Trump Administration. Key points of discussion include the reopening and management of the Strait, though Iran insists they will remain in control of the Strait. On Friday the US market ended higher, but we won’t actually see how they will price the latest news until Tuesday evening (Australia time) as they have a public holiday Monday 25th. The Iran deal could still fail. Even if it is finalised, critical infrastructure has been damaged. It will be a while before the world returns to pre-war energy prices, if ever.

For the ASX, not a bad day at all with the ASX200 finishing slightly up. Interestingly the tech sector had a volatile session, sinking until about lunch time before recovering to a soft finish (-0.45%) by EOD. Materials was the outperforming sector (+1.84%) while Energy (-2.41%) was the laggard. Unsurprising given the market anticipating a deal from the US/Iran conflict to emerge. The Gold index (XGD) was also a standout, rallying +4.93% for the day. PC2 and OBM benefiting here. A disappointing development for GYG occurred just as markets were closing as a group of U.S. employees have sued, alleging GYG did not give prior notice to staff before closing all its Chicago restaurants.

Portfolio Commentary

Portfolio did nicely today, generating +1.39% to the ASX300 +0.42%. As we approach the end of our second month, this will give us a better picture of the return drivers.

In terms of portfolio positioning, we halved the WDS position. If positive news regarding the US/Iran deal comes through, the stock will likely sell off. While I still believe the long-term effects on the energy market will be positive for producer like WDS, you can’t fight market momentum or sentiment.

We did, however, initiate a position in Bravura Solutions (BVS). A software company that provides services for the wealth and funds management industry. They recently have had a pull back, provide saw an opportunity to take a small position.

I’m conscious that the fund is now 28% in Tech, well above the Index 2.1% weight. Checking my rules, now more than 30% single sector weight. Even now it feels like a bit much.

Investment Activity

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Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

• Bal Start: $1,088,199

• Bought None

• Sold: None

• Bal End: $1,091,811

• Cash: $149,196

Market Commentary

Overnight markets were choppy but ended up slightly. Iran’s Supreme Leader issued a decree banning enriched uranium from leaving the country, causing oil to jump 4%. The S&P500 equal-weight gained more than the market cap weighted index, suggesting market breadth increasing. The US 10-year Treasury yield dropped slightly to 4.57%. ASX 200 futures are up for the open.

ASX 200 rose +0.41%. driven mostly by a commodities bounce. Materials rallied +1.27% while Comms dropped -1.86%. Interesting stock highlights were GYG and APX. GYG announced it is pulling out of the US market. The stock actually rose +9.57% on the news. Focus on the Australian business and a one time hit to the balance sheet appears to be worthy of a rally. APX released its resultsWhile the broader index cheered the easing interest rate expectations from yesterday’s softer jobs data, the Consumer Discretionary sector (XDJ) finished down -0.22%. Investors remained cautious about cost-of-living impacts on retail and automotive segments, keeping stocks like Wesfarmers (-0.20%) subdued. Heavy Weight Drags: On the losing side of the ledger, Insurance Australia Group (IAG) dropped -3.44%, while tech play Block (XYZ) fell -2.94% and Lendlease (LLC) lost -2.84%.

Portfolio Commentary

C79 had a good day. Gaining +5.66%. OBM also climbed +2.47%. Following the gold price. SKS also had a solid day, rising +2.31%. ZIP unfortunately slid -2.65% even though Zip announced they officially settled their trademark legal dispute with Firstmac to permanently keep the “ZIP” brand name in Australia. XRO fell -1.42% ending the week down.

Investment Activity

None

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Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

• Bal Start: $1,073,106

• Bought None

• Sold: None

• Bal End: $1,088,199

• Cash: $149,196

Market Commentary

Markets rallied overnight as the prospect of a resolution for the Middle East conflict was teased. The US government suggested that the negotiations were in the final stages. This sent oil prices lower, and equities higher. Gold was up, bringing the price back above $4,500/toz. Copper also rallied overnight, usually a bullish signal. Nvidia once again beat earnings expectations generating $81.6b in revenue for the quarter. Stock still fell after market though (-1.5%). It led the Tech sector, which rallied +1.87%. Consumer Discretionary also gained 2.50%. The largest detractor was Energy -2.59%. ASX Futures are up pre-market, so hopefully the Aussie market will follow.

We had a lot of AU economic data releases today. Unemployment was higher than expected at 4.5%, while Consumer Inflation Expectations have dropped slightly from 5.9% to 5.6%. Higher than expected unemployment figures may lead to the RBA cutting rates, or at least not hiking them. At close the ASX200 had a relief rally, gaining +1.47%. Materials (+2.56%) led the relief rally with BHP (+3.1%) and Rio (+3.2%) having good days despite weak iron ore futures. Energy was the laggard (-0.95%), which was driven by a -5.6% drop in oil prices.

Portfolio Commentary

PC2 had fantastic drilling results. Grades range between 0.73g/t AU to 4.72g/t AU. The average is around 2.16g/t AU. They are aiming to complete a collaboration with C79 on a test work program for one particular drill hole, one with 6.7m of 2.79g/t AU from 130m. This means a 2.79 grams per tonne grade from 130m down for a length of 6.7m. Unfortunately the selling pressure for PC2 was greater than the buying support. C79 on the other hand rallied on the back of the gold price rising.

JDO was the top performer of the portfolio today. There was no news specifically on the stock. Could be related to the economic data releases.

Investment Activity

Did not trade.

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Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

• Bal Start: $1,090,809

• Bought None

• Sold: C79

• Bal End: $1,073,106

• Cash: $149,196

Market Commentary

US markets were down overnight, while Euro markets (FTSE, DAX) were up. US 30-year bond yield rose to 5.20% led by concerns over energy prices and inflation fears. SpaceX’s IPO is aiming to raise $75 billion. Higher energy prices also raised Canada’s inflation rate to 2.8%. This is its highest in two years but this was apparently below expectations. Oil prices are still above $100 per barrel, however the futures market for them is slightly down. Gold also fell to below $4,500/toz.

ASX started the day ok, but then completely gave up after lunch. Sectors and stocks that were performing gave back their gains. The ASX200 dropped -1.61% at close. The negative sentiment from the bond sell-off and RBA minutes affecting markets. The RBA indicated underlying inflation could remain sticky until late 2027. BHP fell -2.2% dragging down the sector. Meanwhile TNE jumped +7.34% after positive broker updates on its latest results. Star of the show was Catapult, rallying +17% after its earnings beat consensus.

Portfolio Commentary

GDG has announced that Genlife will provide retirement solutions through the CFS platform. Good development. XRO will be launching a Lite Plan in the Philippines. GLF was the best performing today with no market news.

The portfolio was hurt by gold names. Both OBM and PC2 fell, -6.8% and -7.8% respectively. PC2 doesn’t hurt so much but OBM is a larger weight in the portfolio (6.2% vs PC2 2.9%).

C79 was cut in half as the stock price follows gold down. We were unable to reduce OBM and PC2 as the day got away from us.

Investment Activity

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Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

• Bal Start: $1,087,521

• Bought None

• Sold: None

• Bal End: $1,090,809

• Cash: $138,343

Market Commentary

Overnight the S&P 500 was flat, the Nasdaq down while the Dow Jones was up. US 10Y yields are continuing to push higher to 4.60%. Energy (+1.81%) led the market driven by ongoing Middle East tensions. The International Energy Agency (IEA) warned that global oil inventories are declining, the Q2 2026 drawdowns are averaging 8.5 million barrels per day. The Tech sector, once again, the laggard of the group (-0.97%). There appears to be a bit of a question mark around the capex spend for DCs and fabs. Seagate CEO spoke at the JPM conference saying that new fabs would take too long to build. Lululemon is in a turnaround battle with founder Chip Wilson. A proxy vote to shake up management is set for June. NextEra Energy agreed to buy Dominion Energy in a deal worth ~$67bn. This would be the world’s largest electric utility company. Lastly, China industrial output was below expectations, rising 4.1% yoy. Manufacturers have been affected by oil prices and have had margins shrink as well as production reduced due to costs rising. ASX futures are up as per Bloomberg news. Doubtful the ASX will have an up day.

The ASX 200 actually did rally, ending the day up +1.17%. Sentiment seems to have shifted into a conservative risk-on mode after President Trump called off planned military strikes on Iran. This sent oil lower and pulled benchmark bond yields down from their highs. This triggered a rotation into defensive shares and interest rate sensitive sectors. Consumer Staples (+3.0%) led with Woolworths up +3.7% following a JPMorgan upgrade. Communication Services (+2.66%) and Financials (+1.72%) were also up on the day. Conversely, Materials and Tech were slightly down.

Portfolio Commentary

OBM rallied another +6.2% on the back of its “DRIVE to 300” strategy. MP1 announced a solid board update by bringing on former JPMorgan Jon Gidney to lead its Audit & Risk Committee, although the price fell -2.1% as it was caught in the Tech sector selloff. 360 was down -1.2% while ZIP continues its rollercoaster ride, dropping -5.4% as a result of consumer spending jitters. COL gained +2.7% showing to be a defensive performer, despite the recent regulatory slap on the wrist.

Investment Activity

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Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

• Bal Start: $1,108,112

• Bought SHA

• Sold: None

• Bal End: $1,087,521

• Cash: $138,343

Market Commentary

Global markets were down on Friday. The Russell 2000 falling the most of all (-2.44%), indicating small caps had a bad day. Gold is detracting further while WTI oil is up a whopping +4.20% to $105.42. Energy was the only sector on Friday to rally (+2.32%) while all other sectors were down. Materials the most (-2.74%). The US 10-year yield hit 4.59%. Inflation fears kicking in. This was universal as well: Japan’s 30-year yield hit 4%, UK 10-year hit 5.17%. The concern is the war will force banks to hike rates as a result of higher inflation. The technology sector is feeling the effects, Cerebras fell -10%. Nothing compared to its 68% hike on IPO day but it could be a signal for the SpaceX IPO coming soon. ASX futures are down leading to open.

ASX ended the day lower as expected. Energy was the winner (+2.0%), while Industrials (-4.02%) and Materials (-2.83%) were the laggards. Couple of interesting stock callouts: Tuas dropped -62.95% after the Singaporean Authority suspended the acquisition review. Brazilian Rare Earths jumped 11.24%, leading the pack of other rare earth miners. WDS energy was up +3.0% on the back of higher oil prices.

Portfolio Commentary

OBM approved the development of a third underground mine as part of an aspirational three-year growth plan to reach 300,000oz annual production. This is very positive for the stock. 360 announced a buyback program. Shows management has confidence in the stock. Could also be a way they can prop up the share price from its lows. SHA was initiated by Morgans with a target price of $8.62 (25% implied gain). The stock has reached all time highs, wary of a retracement. C79 is breaking down further. While it is only 3% of the portfolio at cost the price looks like it is gapping down to the previous support line. Should it drop further we’ll cut the position. PC2 dragged the portfolio -6% driven by lower gold prices. SKS also dropped -6%, coming off its highs and following the drawdown in Tech.

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Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

• Bal Start: $1,102,415

• Bought None

• Sold: None

• Bal End: $1,108,112

• Cash: $149,149

Market Commentary

As mentioned Thursday, Cerebras IPO’d to much fanfare. Percentage gain on the first day was 68%. A very oversubscribed IPO. The whole US market ended the day up, less than a percent, but up. Records all round for the S&P500, NASDAQ and Dow. Tech was the solid leader of the day (+1.85%) while Materials lagged (-0.80%). Gold and Oil were relatively flat. A little concerning was the higher retail sales figure, sending the US 10Y yield to 4.48%.

With Kevin Warsh now nominated to the Fed, the test is whether rates will indeed remain on hold (as the most likely scenario). Turning to the Middle East, the International Energy Agency (IEA) warned that global oil markets will remain undersupplied until October even if the conflict ends. Stockpiles are drawing down at a record 4million barrels per day (bpd) in March and April. This is while OPEC is cutting production. Something that is worth mentioning, China exports rose 14% yoy to US$359.4bn. This is above estimates of 7.9%. Imports also were up 25%. Apparently the trade surplus has widened by $85bn (so much for tariffs).

The ASX closed lower on Friday primarily due to Materials as every other sector was up. This mining loss was probably driven by falling copper, gold and silver prices. Iron ore futures were also down. However, the biggest reversals were in the Tech (+3.2%) and Financials (+1.0%).

Portfolio Commentary

HMC price target cut to $3.4 by Jefferies (17% implied gain). Jefferies suspect that fund raising is challenged given the language in the update and the people appointed in the company. Meanwhile in tech-land, XRO’s target price was raised to $235.8 by Macquarie. WOW! They are confident. Implied gain of 190% (by the way, $235 and 80 cents? Very specific). MP1’s target price was also raised by Macquarie to $26 (I’m leaving out the cents). Implied gain of 100%. I’m keeping an eye on MP1, nearly 12% of the portfolio now.

On the downside, WDS has had some union workers striking at the LNG plant. The stock is showing some weakness but there is still more demand for units (according to my screen) than supply. The stock is also only 3% of the portfolio.

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Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

• Bal Start: $1,081,289

• Bought CCL, SHA, LOV, SRG

• Sold: None

• Bal End: $1,102,415

• Cash: $149,149

Market Commentary

US markets closed higher overnight. US 10-year yield briefly hit 4.50%, its highest since Jul-2025. Most US sectors were up, Comms (+2.65%), Tech +0.98%, COn D 0.75%. While Utilities -1.26%. Gold and oil are relatively flat, $4,691/toz and $101/bbl. Senate confirmed Kevin Warsh as Federal Reserve chair in a 54-45 vote on Wednesday, replacing Jerome Powell whose chair term ends May 15, though Powell will remain on the board. US April PPI up 6% year-on-year and 1.4% month-on-month, the largest annual gain since December 2022, with final demand energy prices up 7.8% and gasoline surging 15.6%.

There was an interesting article (link below) on Cerebras. They will be IPO’ing tomorrow. Cerebras Systems was initially priced at $185 per share on May 14, 2026, selling 30 million shares and valuing the company at over $5 billion. The stock is listed on the Nasdaq under CBRS. It has seen strong demand due to the AI trend.

https://www.morningstar.com/stocks/why-ai-chip-designer-cerebras-is-2026s-hottest-ipo-yet

The ASX managed a slight gain by close. It had an initial move down before a late recovery, driven by banking. CBA rose 1.8% in the final hour, helping the index up while technology and consumer were down. Materials was flat despite BHP and Rio both climbing to record highs. The broader market appeared cautious with decliners outnumbering advancers.

Portfolio Commentary

The AFR reports that the Federal Court has ruled Coles misled shoppers with its discount promotions, with implications for the broader retail sector and a pending Woolworths judgment still pending. Stock was down -2.4% today. For WTC, UBS notes DSV confirmed it will migrate from CargoWise to Tango from 2027.

Xero reported FY26 NPAT down -27%. FY27 EBITDA guidance is $860-920m vs. NZ$876m consensus. Melio is expected to reach EBITDA breakeven by 2H28. FY27 revenue guidance of NZ$3.62-3.73bn vs NZ$3.58bn consensus (3% beat). MP1 released results and jumped 26% today. Given it is one of the largest weights in the fund, it will be time to trim the position soon.

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Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

Something outside of Australia. Came across this stock while reading other publications. As sectors, Software and Healthcare have sold off, and this is both (a contrarian’s dream). This is definitely something interesting to analyse. Let’s go!

Key Points

• Veeva’s dominant market share in critical life sciences software, paired with its status as a Public Benefit Corporate (PBC), secures high customer retention and structural margin stability.

• Global life sciences R&D spending remains structurally above pre-pandemic level, acting as a tailwind for the Development Cloud. Crucially, the migration from Salesforce to native Vault CRM removes 15% to 20% royalty fee. This shifts the product mix towards a higher gross margin.

• Blending multiple valuation methods under conservative growth constraints yields a BUY recommendation with a weighted price of $231. Against the current price of $166.34 (as at 10 May 2026), this implies a 39% upside potential. Our stress tested scenario range ($161 bear to $295 bull) show the current market is sitting at our valuation floor

Valuation Summary

Executive Summary

Veeva Systems (VEEV) recommended as a BUY with a weighted target price of $231, representing an implied upside of 39% from its current price of $166.34 (as of 10 May 2026). Our scenario analysis establishes a valuation range of $161 (for the bear case) to $295 (for the bull case), indicating the current price is trading at a discount.

Multiple valuation methods were utilized to provide a comprehensive assessment and eliminate single-model bias. The $231 target price is derived from a cross-functional valuation matrix incorporating a 3-statement DCF model (anchored by a 9.6% WACC), peer multiples overlay, and a sell-side consensus aggregation. Sensitivity tables were used to stress-test the outputs of the model, varying WACC and terminal value assumptions.

Veeva trades at a premium to its peers, commanding a 37.5x P/E multiple against a 24.8x peer median. This premium is justified by Veeva’s 80% gross margins and dominant market share. To ensure a structural margin of safety, our baseline 3-statement projections integrate a conservative, below historical growth factors to establish a floor.

In addition, conservative growth assumptions were used in the 3-statement model to provide margin of safety to the downside. The current trading price offers a suitable entry point significantly below intrinsic value.

Investment Thesis

• Dominant Moat: Veeva provides mission-critical software for a highly regulated industry with high switching costs. Retaining 12 of the top global pharma giants through the Salesforce migration proves the product inelasticity. On average, enterprise clients use 4 or more Veeva modules, creating an interconnected ecosystem. Furthermore, the transition provides an opportunity to upsell to customers onto the Veeva Vault

• Margin Expansion: The Vault CRM migration is outperforming expectations, with Veeva pulling forward the legacy platform end date from 2030 to December 2029. This will eliminate of the 15% to 20% Salesforce royalty fee drag by 12 months, driving an immediate improvement in operating margins.

• Favourable Tailwinds: Global R&D funding remains structurally above pre-pandemic levels, with the industry shifting towards more complex, high-value clinical studies. Veeva’s R&D segment accounts for 55% of its business, and is growing at double digits, well-positioned to capture any increased R&D spend from big pharma.

• AI Implementation: There has been keen interest from Veeva’s clients regarding the integration of AI agents into the platform. The company is currently investigating token-based pricing models for AI. Present AI use cases are operating at 45% margins, which is dilutive to Veeva’s core 80% subscription baseline. This margin gap is driven by third-party cloud computing pass-through costs via Amazon Bedrock. If AI token consumption scales rapidly to 10% of the overall revenue mix, it will create a 400-basis point contraction in blended corporate gross margins that consensus estimates have overlooked.

• ESG & Shareholder Alignment: Veeva has a strong balance sheet with $5.1b in cash equivalents and zero debt. The Board announced a $2 billion share buyback program, signalling baseline valuation confidence. However, Veeva’s heavy use of stock compensation results in a slow dilution for equity holders. This $2billion buyback acts as a sterilisation mechanism, absorbing the effects of the SBC dilution. In addition, Veeva’s SBC, positive option-exercising rules, and pay transparency strongly align management and employees with shareholders and showcases strong governance.

Key Risks

• Client Concentration: Veeva counts 14 of the top 20 global pharmaceutical companies as clients, representing 35% of subscription revenues. Contract churn is cyclical and capped by platform switching costs. A 20% pullback in spend from just two of these sponsors, creates a $45 million headwind to recurring subscription revenue. Management's mitigating this risk by increasing the win rate of mid-market clients. Mid-sized accounts require less custom implementation, yielding better margins compared to the customized enterprise contracts of the top 20.

• R&D Spending: While current funding indicators remain elevated, any regulatory contraction in clinical trial volume would immediately hit Veeva's high-margin subscription layer. CRO backlogs and China-sponsored trials act as a primary leading indicator; a systemic 5% contraction in global R&D budgets would directly impair our core revenue growth forecast, compressing our baseline target valuation toward our $161 Bear case floor.

• Auditor Risk: Veeva’s external auditor has been servicing the company for 10 years. Governance best practices generally suggest rotating auditors or retendering the audit contract every 5 to 7 years to prevent the "rubber-stamping" of financials and to ensure independent oversight. While not an immediate red flag, it is a governance risk worth monitoring. Furthermore, the auditor has previously highlighted the inherent complexity of auditing Veeva’s revenue recognition, given the sophisticated nature of the business and the various systems used to track and record multi-product customer spending. This system complexity increases the tail risk of revenue recognition.

Company Overview

Veeva is a provider of cloud-based software tailored for life sciences, serving over 1,400 customers. Their unique offering is a turnkey software platform that smaller companies can use to conduct trials and studies, while larger clients are able to customize packages.

Uniquely, Veeva is a Public Benefit Corporation (PBC), legally mandating the consideration of all stakeholders and make a positive social or environmental impact alongside profits. This is a structural alignment mechanism that lowers regulatory risk and insulates the company from predatory short-term pricing practices, securing multi-decade customer retention. PBCs are legally required to consider the impact of their decisions on all stakeholders (including employees, communities, and the environment) and to regularly report on these matters.

Veeva’s global headcount stands at 7,928 employees, reflecting a disciplined 8.7% year-over-year expansion (+637 FTEs) with 4,194 personnel concentrated in the United States. Crucially, this headcount growth tracks below Veeva’s revenue expansion, proving that the business is scaling its global infrastructure without inducing a corresponding linear expansion in personnel costs

Debt & Capital Management

Veeva is led by its principal founder and CEO, Peter Gassner, who maintains a strong alignment with 7.5% of shares. The company enjoys significant institutional backing from investment firms such as Vanguard, BlackRock, T. Rowe Price, and Alliance Bernstein, among others holding about 98% of the free float.[1] The highly institutional support limits retail and wholesale participation creating a tight float environment prone to price volatility during quarterly earnings.

As a core part of the company’s compensation philosophy, Veeva regularly grants equity to its employees. While this stock-based compensation creates a 2-3% dilution drag for equity holders, it builds strong staff alignment with shareholders.

This is reflected in the leadership team as well, with an average tenure of 9 years, with several senior personnel exceeding 10 years. The institutional memory lowers execution an operational risk. A full list of key directors containing the titles and tenures is located in the Appendix.

[1] https://finance.yahoo.com/quote/VEEV/holders/.

Short Interest

Short interest has historically been low for Veeva. Currently, short interest sits at 3.92% of the free float, which represents its highest level in the last 5 years. This increase in short interest originally spiked in late 2024 reflecting market anxiety over the execution risks tied to the Salesforce-to-Vault CRM migration announcement. While the total percentage of shorted float remains minimal, the subsequent share price contraction from approximately $300 down to around $165 has fully priced in this migration friction, exhausting the original bear thesis. Because institutional blocks lock up 98% of the public float, the active trading liquidity pool is exceptionally thin.

Any positive operational update regarding accelerated Vault CRM migrations or better-than-expected margin preservation will act as an upward catalyst. This setup forces short sellers to compete for scarce available shares to cover.

Recent Earnings Call

Veeva held a results call in March 2026. It was mainly Q&A from sell-side analysts. Key insights drawn from the call were:

AI Implementation

• Management confirmed that AI modules will be priced using a token-based system, indicating early demand for the modules.

• Crucially, margins for this model are 45% currently, which will be dilutive to the core revenue margins of 75-80%. The lower AI margin is driven by pass-through costs via Amazon. While management expects the unit economics to expand overtime, near-term margins may compress if the modules scale.

Salesforce Split

• Management projects that the legacy CRM business will contract from 20% of total revenue down to 10% by 2030. This contraction reflects structural product mix diversification rather than absolute customer churn.

• As customers migrate to Vault CRM, legacy Salesforce royalty fees will systematically roll off.

• The migration of customer onto Vault CRM has been a major upsell catalyst with moderate uptake. Company on track to migrate 14 of its 20 top clients.

Customers

• The Development Cloud (R&D Segment) continues to outpace the Commercial Cloud growth

• Veeva is has successfully captured 140 mid-sized accounts. Management confirms the win rate in the midsize market has been higher than the Top 20 providing a long tail of smaller customers using turnkey configurations requiring minimal implementation.

Guidance Updates

• Veeva will no longer provide quarterly guidance, opting instead to report on rolling trends to better reflect long-term business health and discourage short-term public market positioning.

• Current guidance tables assume stable macroeconomic and pharmaceutical budget stability, signaling that any subsequent recovery in clinical trial volumes represents upside.

JPM Health Conference 2026

Management reaffirmed full-year FY27 financial guidance, confirming that over 115 enterprise customers are now live on the native Vault platform. This confirms steady execution momentum and mitigates immediate technical roll-out concerns.

Our 3-statement model projects FY27 total revenue of $3,574m, establishing a conservative floor that sits slightly below management’s $3,585m guidance midpoint. To eliminate historical growth distortions, our baseline forecast uses a harmonic average of historical quarterly revenue growth rates. Isolating Commercial and R&D subscription reveals our baseline numbers match management’s internal pacing almost exactly. This alignment yields two structural insights:

a) Veeva is using conservative growth estimates to cushion variation in actuals versus forecasts.

b) Consensus sell-side analysts are using optimistic growth rates, based on their published target prices.

Management does not explicitly break out Professional Services dynamic. The simultaneous execution of the Salesforce exit and the deployment of net-new AI modules will drive a short-term demand for specialized migration and data-cleansing assistance from Professional Services.

In addition, management maintains a clean track record of outperforming consensus and guidance GAAP EPS expectations. The historically strong execution and our conservative baseline ensures a margin of safety for our recommendation.[1]

[1] https://finviz.com/quote?t=VEEV&p=d&ty=ea.

Business Model & Segments

Veeva operates a high-margin Vertical SaaS business model structured around two core pillars: Subscription Services (84% of total revenue) and Professional Services & Consulting (16% of total revenue). This revenue mix is segmented across two primary operational categories:

Commercial Solutions

Commercial Solutions consists of comprehensive applications to assist in sales, marketing, and getting a product ready for launch. According to management, the total addressable market, or TAM, for Commercial is $6B.

Applications include Veeva CRM, which currently accounts for 20% of the business, Veeva Vault Medical for medical inquiries, Veeva Crossix, which is a newly acquired privacy platform, Veeva Open Data for sales, and other lower revenue applications.

Commercial represents 45%of the business as of FY26, down from 52% in FY23 reflecting the intentional shift in to the faster growing R&D segment. Revenue growth rates are usually in the high single digits, with the exception of FY26 which achieved 12.1% growth

Commercial solutions have blended gross margin of 80%, where subscription gross margins sit at 88%, offsetting the lower professional services margin baseline of 17%.

R&D Solutions

R&D Solutions includes development applications spanning clinical, regulatory, quality, and safety functions built into Veeva Vault, its premium platform, with a TAM of $3b. R&D Solutions support clinical drug development, with the primary goal to streamline the trials process which is known to be fraught with bottlenecks.

R&D represents Veeva’s primary engine of growth, expanding at double digits (+23% in FY25 and +20% in FY26). Driven by the shift toward complex, multi-site biopharma trials. We model R&D expand from 55% of total revenue in FY26 to 62% of the blended corporate revenue mix by FY31

Blended gross margins match the commercial segment at 80% but feature better dynamics. While R&D subscription gross margins sit at 87%, the segment’s associated professional services command a higher 44% margin baseline (compared to Commercial’s 17%).

EBITDA Bridge

Direct software delivery and infrastructure hosting costs are minimal. Corporate outlays are heavily weighted toward employee-related operating expenses across R&D, Sales & Marketing, and General & Administrative (G&A)

When isolating Stock-Based Compensation (SBC) as an independent operational layer, the non-cash equity issuance unmasks the true cash generation capacity. Management confirms a majority of their costs are employee related expenses.

Using the assumptions in the valuation model for FY27, we can see operating expenses increase dramatically.

Regulatory Environment

Veeva operates within a highly regulated industry. Their clients are governed by the FDA in the United States and the EMA in Europe. Its software is specifically designed to help clients maintain compliance with these regulations. Veeva looks to help medtech and pharma firms navigate data privacy and clinical trial transparency laws through its Unified Strategic Platform. [1]

Over the last two US presidential administrations, there have been two key pieces of legislation with differing impacts on the industry:

Inflation Reduction Act (IRA): This law introduced Maximum Fair Price negotiations. It establishes a mandated ceiling price where the Secretary of the Department of Health and Human Services is authorized to directly negotiate the Maximum Fair Price for eligible drugs.[2]

The IRA acts as a double-edged sword. While it pressures pharmaceutical margins and subsequently tightens software procurement budgets, it simultaneously creates an acute need for robust compliance and data transparency tools.

The One Big Beautiful Bill Act (OBBB): This legislation restored 100% tax deductions for domestic R&D expenditures. This acts as a counterweight to the pressures of the IRA, incentivizing Veeva’s customers to keep their clinical trial operations within the United States, which directly benefits the Veeva Development Cloud.[3] Consequently, we are likely to see lower operating expenses for domestic drug R&D, potentially freeing up more budget allocation for specialized software. The OBBB also enacted roughly $1 trillion in Medicaid cuts, forcing manufacturers to expand patient assistance programs and discount tracking. This higher regulatory complexity further drives commercial demand for Veeva’s applications to manage contracting and rebates.

Global Data Privacy Regulations: Veeva is subject to strict data privacy laws globally. This includes HIPAA in the United States, the EU GDPR in Europe, the UK GDPR in the United Kingdom, and the PIPL in China. In these jurisdictions, Veeva processes data on behalf of customers who operate as data handlers. These laws govern and protect how sensitive health information is collected, transferred, and maintained.

[1] Veeva website

[2] https://www.scirp.org/journal/paperinformation?paperid=150681

[3] https://www.ballardspahr.com/insights/alerts-and-articles/2025/08/impact-of-the-one-big-beautiful-bill-act-on-the-life-sciences-industry

Industry Environment

Clinical trials are long, complex processes with a high amount of regulatory compliance. Early clinical trial software applications streamlined operations by moving workflows from pen and paper to online environments. Previously, patients’ clinical trial data was collected manually in a medical chart. Transcriptions were done by a nurse, who then faxed the records to the pharmaceutical company or to data management teams.

Electronic data capture, or EDC, allows patient data capture during the patient visit, which improves real-time insights. Trial sponsors have increasingly adopted software, driving rapid growth for application providers

Biopharma R&D spending is the primary driver for Veeva’s software. A report from IQVIA, a competitor to Veeva, stated that despite pricing pressures, the industry is seeing a shift toward high value studies and trials alongside AI enabled efficiency.[1] The same report indicated that R&D funding levels remain well above pre-pandemic levels. [2]

Some insights from the 2026 report were:

• R&D deals between China-headquartered and international companies reached an all-time high.

• Clinical trial starts are increasingly concentrated among US sponsors.

• The small molecule share of trial starts has experienced a long-term decline in all development phases. This indicates the shift to high value, complex, science.

These industry trends should drive further adoption of software and data. VEEV’s products address many of these issues and should capture more wins as a result.

Another report from ZS also stated that R&D spending is shifting in favour of high value assets and toward Chinese biotechs.[1] Asia as a segment account for 10% of Veeva’s revenues. This is expected to grow in future. For financial modelling purposes, regional exposures were kept consistent.

In 2023 Veeva held 26.8% market share, followed by IQVIA 17.7%, Salesforce 16.4%, and Oracle 11.2% according to Intuition Labs. They estimated the total TAM at $20 billion in 2025/26. This implies roughly 16% market penetration by Veeva based on its $3.2 billion revenue in FY26.

The software industry has high switching costs. Moving platforms takes significant time, money, and organizational training to achieve full system integration. This dynamic explains why 14 of Veeva’s top 20 clients choose to stay on their platform rather than moving to a competitor like Salesforce during the recent platform split.

[1] https://www.zs.com/insights/pharma-industry-outlook-2026

[1] https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/global-r-and-d-trends-2026

[2] https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/global-r-and-d-trends-2026

Competitive Moat

In terms of its competitive advantage, Veeva Systems high switching costs keep customers sticky, which is especially advantageous because pharmaceutical clients must maintain constant regulatory compliance.

The platform continually strengthens this moat as customers adopt more modules. As of FY25, major customers owned an average of four or more products, making their operational workflows integrated and difficult to replace[1]. Veeva has a portfolio of about 40 products that it can cross sell to its user base.

Veeva is also innovating constantly to design and create new software solutions for its clients. At present, there are 111 current patents expiring between 2028 and 2048, alongside another 164 pending patent applications.[2] This protects their core intellectual property and securing future growth avenues.

Competitors

Veeva has a range of competitors in the space including Oracle, and Salesforce. Below are two closer competitors described.

• Certara: Accelerates medicines to patients using proprietary biosimulation software and technology to transform traditional drug discovery and development. Its clients include global biopharmaceutical companies, leading academic institutions, and key regulatory agencies across 60 countries. They are one of the smaller competitors.

• IQVIA: Main competitor. Provides biopharmaceutical development, commercial outsourcing, information services, and technology tools on a global basis. Operating in over 100 countries across the Americas, Europe and Africa, and the Asia-Pacific. The company primarily serves biopharmaceutical companies, as well as other healthcare companies.

In terms of a comparison to direct peers, VEEV is trading at a premium to its peers at a PE of 37.5x (51% premium), and EV/EBITDA 34.2x (135% premium). In terms of Gross Margins, VEEV has a higher margin for its products (75% vs 61% average).

Veeva looks expensive to peers on EV/EBITDA and PE multiples.

[1] https://intrinsicinvesting.com/2024/07/23/veeva-a-winning-platform-strategy-in-life-sciences

[2] Veeva 2026 annual report

Capital Management & Balance Sheet

Veeva has an asset light, highly liquid balance sheet, and they carry zero debt. Cash consists of 16% of assets, totalling $1.4 billion, and their short-term investments consist of 57% of assets, totalling $5.1 billion. The net effect of investments maturing and the purchase of new securities is roughly 30% of revenue. Veeva is very well capitalized, with plenty of dry powder to execute strategic objectives, launch new products, and complete acquisitions. Their presentation at the JPM Healthcare Conference explicitly mentioned strategic acquisitions as part of their capital allocation focus.

In terms of their business model, cash flows and receivables exhibit high seasonality, with a distinct spike occurring in the fourth quarter of each fiscal year when customers renew their subscriptions for the following year. At the same time, payables remain very low, meaning Veeva pays its obligations promptly. This dynamic is validated by the working capital cycle metrics.

Days sales outstanding was 130 days in FY26, reflecting standard enterprise billing cycles. Days payables outstanding sat at 16 days as of FY26, confirming quick vendor payments.

Veeva also receives upfront money from customers that is classified on the balance sheet as deferred revenue, or unearned revenue. This typically represents about 50% of total revenue each financial year. This cash collection profile is highly favourable for Veeva’s balance sheet as they receive customer payments first before delivering the full service. Operational execution risk here is minor because clients are paying in advance for critical software that they already utilize or are actively deploying.

Operating margins are best in class relative to its peer group. When we remove the impact of stock-based compensation from the cost of services, the gross margin increases from the high 70% to near 80%.

In May 2026, the Board authorized a $2 billion share repurchase program to return capital to shareholders. This appears to be a positive signal given that the company has never paid dividends and maintains an exceptionally strong cash position. As an additional rationale for the stock buyback, it could serve as a strategic method to offset the dilution caused by the company’s SBC program, though this remains an assumption.

Contract Structure, Customers, & Channel Checks

Veeva’s contracts are subscription-based models. Subscription costs are not publicly available from Veeva as clients are given bespoke pricing to suit their needs. However, sources online put the typical range between $600 and $2,400 per user per year.

The contracts have an annual cycle as the deferred revenue and accounts receivable figures are cyclical. The largest changes occur in 4Q each year, where customers simultaneously pay their subscriptions and renew. Deferred revenue is 55% of the subscriptions segment on the fiscal year, which is typical for a subscription model.

Survey Outreach

In order to get direct feedback from users, we emailed key partners (and IR teams) listed on Veeva’s website to enquire.

Companies listed on Veeva website as key partners:

Each company type was sent a slightly different set of questions.

Veeva also has a website where we can search for clinical studies happening now. Biogen and Gilead are currently conducting trials in Melbourne. They were contacted to see if they are using Veeva.

Survey Responses

Unfortunately, only Novo Nordisk responded to the survey. Only confirming that they are indeed a customer.

Employees

Reviewing Glassdoor for employee reviews, 73% approve of Peter Gassner. Their average employee score out of 1,519 ratings is 3.5, whereby 60% of staff would recommend working there. Veeva’s score is average on an absolute basis but is within 1 standard deviation of the Information Technology sector. The main criticism from employees is senior management.

Sell-Side Analysis

Veeva is a well-covered stock, with upwards of 20 broker analysts actively forecasting the company’s performance as shown in the Appendix. The majority of analysts have recently recut their price targets because the quarterly earnings call has just been completed. The median target price sits at $275, representing a 65% upside from the current share price. The earnings call notably had analysts excited by the growth prospects of AI integration across the business.

Current forward P/E multiples from the sell-side have Veeva trading at roughly 17x. Based on my calculations, that multiple implies an 80% growth in EPS above our baseline estimates.

To mitigate macro distortions, our model introduces intentional forecasting conservatism using a strict historical harmonic growth rate framework. In the first year, projections assume top line growth rates remain flat, in line with historical harmonic performance, to insulate against near term fluctuations. Future years were forecasted using the harmonic average which steps up gradually, scaling at a rate slightly exceeding the company’s calculated cost of capital.

The sell-side median target price of $275 is very near our bull case target price of $285. This suggests sell-side growth expectations are incredibly high. However, Veeva remains a solid investment even under more conservative assumptions.

However, given the high hurdle set by consensus, any minor miss would likely trigger near-term share price retraction, especially as sell-side analysts remain structurally cautious regarding broader sector multiple expansion.[1]

[1] CMC Markets

Supplier Analysis

As a software provider, Veeva’s suppliers are primarily cloud infrastructure and technology partners. Historically, Salesforce was a critical partner, providing the core platform for Veeva CRM. However, Veeva is actively insourcing by moving its core applications to its proprietary Veeva Vault platform. This transition is significantly reducing its structural dependency on external providers like Salesforce, which now effectively becomes a direct competitor.

Amazon Web Services is Veeva’s primary cloud infrastructure partner. This relationship is critical to Veeva’s daily operations. As the business grows, Veeva will inevitably require more capacity from data centre cloud services for the storage of data it collects, as well as the substantial computing power required to run the AI tools on its platform. This expansion will naturally increase the expense line for data centre capacity. The main risk here is that Amazon possesses the pricing power to pass through higher energy and internet costs, at least until more aggregate data centre supply comes to market.

In terms of overall costs, Veeva explicitly states in its financial reports that the vast majority of their operational costs are employee related expenses.

ESG Analysis

As mentioned earlier, Veeva is a Public Benefit Corporation, and ESG is core to Veeva’s charter. The company has committed to reducing absolute Scope 1 and 2 emissions by 58.8% and Scope 3 emissions by 63.8% per million USD of gross profit by FY2035. For the fiscal year ending January 31, 2025, Veeva reported approximately 55,000 metric tons of CO2e emissions.[1]

Veeva also has a 1% Giving Program, whereby Veeva provides 1% of an employee’s salary to support a non-profit of the employee’s choosing.

Morningstar has assessed Veeva as a 4 Star ESG company with a low-risk rating. One area of concern from their assessment is data privacy and cyber security. This is mitigated by Veeva’s ownership of Crossix, which is explicitly designed to manage data privacy and tracking.

Management share options have vesting rules that are highly favourable to investors. Shares need to be above the 52-week high for 60 days, and options are then exercised at that 52-week high price. This provides an excellent alignment with shareholders and prevents insiders from benefiting on lower strike prices when the broader share price falls. Employees also receive shares as a standard part of their core compensation. This creates great alignment of the broader staff to Veeva’s purpose and long-term growth.

Governance

Veeva’s transparency regarding compensation and other adjacent topics is very positive. They openly disclose non-employee director compensation plans as well as disclosing the annual total compensation difference between Mr. Gassner and the median employee, which stands at $470,833 and $140,473 as of FY26, respectively. Unlike other highly specialized and competitive technology industries, Veeva actively promotes that it does not mandate non-compete agreements for staff. This progressive policy likely increases Veeva’s staff retention because employees are not locked out of their industry by leaving.

Board Composition

The board consists of individuals with a wealth of experience across software development, healthcare, life sciences, and robotics. Many have held positions at other highly successful medtech companies, such as Intuitive Surgical, or currently sit on the boards of other adjacent businesses.

On the downside, the majority of the board are men. Having a more diverse board in both professional skillset and life background would add a distinct benefit to decision making. In addition, a couple of the directors are co-founders of Veeva or former management. There is an inherent risk of biased decision making and outsized influence when you have 3 of 9 votes more than likely to vote in lockstep with each other. A full list of board members is available in the Appendix.

The CEO and Chair roles are held by separate individuals, which is a classic sign of strong corporate governance.

Auditor Report

A valid cause for concern from a governance best practices standpoint is that Veeva’s auditor has been servicing the company for 10 years. A common rule of thumb is that the external auditor should be rotated or at least have the contract go out to tender every 5 years. While there is no evidence suggesting Veeva did not go to market for an auditor, the perceptive risk is present. There have been historic corporate examples where an unrotated auditor rubber stamped financials to preserve a lucrative contract.

The auditor’s report also noted a Critical Audit Matter. Because Veeva has multiple service offerings spanning Subscription vs. Professional Services and uses various IT applications to track them, the auditor stated they had to deploy specialized IT methods to collect the data and use significant auditor judgment to assess it. This technical complexity did not change their clean audit opinion however.

[1] Veeva, 2026

SWOT Analysis

Strengths

• Holds a commanding lead in the CRM space, with 80% market share.

• Gross margins are extremely wide at 86% for subscriptions business.

• Recent inclusion in the S&P 500 and a large institutional backing make confidence in the company grow.

• The company has a strong balance sheet with no debt, lots of cashflow, short term investments and cash.

• The industry has high switching costs. Clients are more than likely to remain on platform after Salesforce separation.

Weaknesses

• High concentration in North America, but with growing revenue segment in Asia.

• Veeva operates in a niche segment, life sciences and has a commanding share. Future growth is likely only possible in other sectors and or more growth in non-USA markets.

• Considering Veeva’s strong balance sheet, it has not distributed any dividends. The concession is the buyback program.

Opportunities

• Expansion into adjacent regulated industries will provide more avenues for growth and a diversified revenue mix.

• With a healthy balance sheet, Veeva could acquire other smaller businesses to add to its verticals. The only risk is they acquire a company outside of its core competency just to grow.

• AI-driven software layers are being included in Veeva’s products. Clients are enjoying the additions and the use cases for AI in life sciences. In addition, clients have themselves been implementing variations to the standard AI agent for their uses.

Threats

• Increased competition from competitors. With such high margins and market share, competitors could be more aggressive with pricing just to win clients.

• Should the R&D spending in life science slow, this would dramatically impact Veeva’s primary and growing segment. Legislation is currently favourable. With the current OBBB Act, there is a sector tailwind for at least the next 4 years.

• AI threatens software business models. Currently a majority of the business is subscription per user based. Veeva is exploring usage-based models which should mitigate some of the risk. However, if clients are becoming more efficient with better models, the number of users and the usage may drop.

Valuation

Multiple valuation methods were used to determine intrinsic value. A traditional DCF model using EBIT, an EV/EBITDA multiple valuation, a P/E multiple valuation using the median of peers, and aggregated sell side targets were all deployed.

Target prices for bear, base, and bull cases were established and weighted. Relative multiple valuations were assigned the lowest internal weights because they represent blunt estimates, and the range across the peer group is too wide to provide predictive value.

Sell side estimates were given a reasonable weight of 30% to acknowledge active analyst coverage, and their own detailed forecasting.

In the final aggregation, the weighted scenario matrix was used to combine the bear, base, and bull cases on the likelihood of the outcomes. A larger probability weight was allocated to the baseline case. The resulting combined target price is $231, implying a 39% gain on today’s trading price.

The recommendation for Veeva is BUY.

Even based on conservative forecasting estimates, the DCF bear case still indicated the share price is trading below its intrinsic value.

Below is more detail on our assumptions and valuation methods.

Assumptions:

As per Veeva’s annual report they expect all of their costs and expenses to increase in future.

• Higher R&D and Opex increase more from employee compensation

• Sales & marketing higher from pushing products, with the hope of upselling.

• Admin cost expected to decrease.

Revenue growth is forecasted using the harmonic mean of prior 4 years (pcp) quarterly growth rates and assume long-term regression to the mean. To reflect mid-market market-share gains, the model applies a 1.5x growth factor onto this harmonic baseline from FY27 to FY31, establishing a conservative annualized revenue growth rate of 8.4%, below the company’s WACC (9.6%).

The blended corporate growth projections roll up to a combined FY27 revenue growth rate of 11.9% across all business segments, tracking below historical rates.

When rolled up we can see the FY27 growth rate is 11.9% for the combined business segments. This is below the prior FY rates.

Operating costs are modelled to expand at 14.9% per year for 5 years, representing a 2.0x growth multiplier relative to revenue growth from FY27 to FY31. Modelling structural costs growing faster than top-line revenues establishes a highly conservative margin of safety for the final valuation metrics.

Discounted Cash Flow

Traditional DCF using EBIT (operating income) as a starting point, adding D&A, less changes in WC, Capex and tax. The effective tax rate was use rather than the corporate tax rate.

WACC of 9.6% was derived from:

• 10-Y US Treasury bond rate of 4.40% as of 05 May 2026.

• Equity risk premium estimate of 4.46% from Aswath Damodaran, well known professor with expertise and data in valuation and ERP.

• Beta of 1.17 based on the average of various sources and calculations (daily & weekly regression of share price to index, and Aswath Damodaran estimate for the sector).

• There is no debt, so WACC is entirely cost of equity.

Using this method calculated a valuation price of $212.32 (27.6% implied gain) using a 3% terminal growth rate

A valuation price matrix was constructed using slight deviation in terminal value (ranging from 1% to 5%) and WACC (7% to 11%). Using the ranges we calculated the various valuation price and their implied gain or loss on today’s price.

Multiples Valuation

This method has been mentioned in the competitor analysis section. Using the EV/EBITDA median of the competitors, the implied EV and valuation price of Veeva was estimated. This was also done using the P/E median except PE was used to find the implied EPS for Veeva, then the valuation price. The metrics for Veeva’s peer group of competitors was source from various outlets.

Based on this method, Veeva appears to be trading at very high multiples to the median peer group.

However, one caveat is the peer group is broad in scope. Some are very large like Salesforce and Oracle, which have diversified software businesses, not just life sciences. Others were small niche players such as Certara.

Sell-Side Valuations

There is value is comparing the sell-side valuation estimates. Using information from CMC Markets, we gathered the listed of analyst who cover Veeva to aggregate their share price forecasts. Almost all of which have recently been updated

Sell-side estimates have and implied EPS growth rate of 80% based on a forward PE multiple (source from Finviz). Tabulated are the lowest, median, and highest valuation targets for the stock.

Appendix

Veeva Survey Questions

1. With the Salesforce partnership sunsetting, what has the response been from early migrators to Vault CRM compared to legacy users?

2. Are you seeing any increased churn or a higher upsell rate into the wider Vault suite during this transition?

3. What has been the impact on the topline as a result of the OBBB Act’s R&D tax deductions?

4. With AI agents being implemented in Vault, is Veeva exploring usage or token-based subscriptions as well as per-user?

5. Is there an ideal subscription model mix target?

6. Have clients been utilizing the AI agents and what has been their response?

7. With the recent stock buyback program announcement, is this intended as an offset to the employee stock-based compensation program?

8. Does Veeva expect buybacks at regular intervals and sizes?

9. A recent industry report from IQVIA cited that China has seen a significant increase in global trials usage. Are you seeing a shift in your customer mix toward local Chinese biotech firms?

10. Are there any specific regulatory hurdles unique to the region?

Customer Survey Questions

Product

1. Which Veeva products (e.g., EDC, Vault, QMS, RIM) do you use?

2. What specific business problem were you looking to solve when you chose Veeva?

3. What were you using before Veeva (a specific competitor, or an internal/manual system)?

4. If you switched from another provider, what was the “tipping point” that made you move to Veeva?

Experience

5. What does Veeva do better than the competitors you’ve seen or used?

6. Are there any particular features you like?

7. Are there any particular features that could be improved?

Satisfaction (1 = Strongly Disagree, 5 = Strongly Agree)

8. Veeva’s products provide significant value relative to the time and effort invested. [1] [2] [3] [4] [5]

9. I am highly satisfied with the responsiveness and expertise of Veeva’s customer service. [1] [2] [3] [4] [5]

10. Our organization is likely to expand our use of Veeva tools in the future. [1] [2] [3] [4] [5]

Delivery Partner Survey

Product Implementation

1. Which Veeva products are the most sought after by customers (e.g., EDC, Vault, QMS, RIM)?

2. How does the implementation of Veeva’s software compare to others?

3. What other/third party software pairs well with Veeva Systems?

Satisfaction (1 = Strongly Disagree, 5 = Strongly Agree)

4. Veeva’s products are better than the competitors. [1] [2] [3] [4] [5]

5. We are highly satisfied with the responsiveness and expertise of Veeva’s customer service. [1] [2] [3] [4] [5]

6. Our organization is likely to expand our use of Veeva tools in the future. [1] [2] [3] [4] [5]

Clinical Trial Survey

Product

1. Are you using a Veeva product for the clinical trial, if so which (e.g., EDC, Vault, QMS, RIM)?

2. Why you did/did not choose Veeva over another providers, if applicable?

Experience

3. Are there any particular features you like?

4. Are there any particular features that could be improved?

Satisfaction (1 = Strongly Disagree, 5 = Strongly Agree)

5. During the trial, Veeva’s product/s has provided significant value relative to the time and effort invested. [1] [2] [3] [4] [5]

6. We are highly satisfied with the responsiveness and expertise of Veeva’s customer service. [1] [2] [3] [4] [5]

Disclaimer: Content is for educational purposes only and does not constitute financial advice. Always do your own research.

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• Bal Start: $1,076,949

• Bought None

• Sold: None

• Bal End: $1,081,289

• Cash: $176,192

Authors Note

Well. It’s been a minute since Paper Mandate has been able to update you on the portfolio. Life got a little busier than usual, and priorities had to be shuffled.

Fortunately, the portfolio kept tracking along. Goes to show what solid fundamental investing can and should do (aka no sleepless nights). The market commentary will be brief so we can focus on the portfolio updates. Let’s go!

Market Commentary

Between 4th May and today (13th May), global markets went from a steady AI-led climb into a volatile period as inflation fears and geopolitical tensions increased. In the US Tech faced a sell-off following a higher CPI than expected (3.8%) and the 10-year Treasury yield increased to 4.45%. In Australia, the ASX200 has been trending down leading up to budget day. It has also been interesting to see the negative effects from the US spill into Australia. The Australian market tends to follow the US down, but not up. In Europe, the ECB paused rates due to volatile energy prices, while in the UK they are calling for Sir Starmer to resign. On the geopolitical front, oil prices are hovering near $100 due to ongoing issues at the Strait.

Portfolio Commentary

For today, the top and bottom performers were:

Since the 4th May to 12th May, there have been a few portfolio updates to sift through.

• Ora Banda’s (OBM) target price was raised to $1.92 by Hartleys. It’s gained 10% in the last week.

• HMC reaffirmed its guidance for FY26. The stock has moved up 16% over the week.

• WTC boosted its guidance but continued to sell off -13%. Enterprise software is still taking a hit.

• MP1 had a great ARR growth and also reaffirmed guidance, sending the stock up +10% in a week

• ZIP had a strong growth in TTV from US expansion and affirmed guidance, it’s only up 1.7% though.

• 360 had a good result but still sold off -15% in the AU market.

• SKS had their target price raised by Morgans to $8.95. Currently at $8.80. Stock up +13% in a week.

• WDS delayed their Browse LNG project. They have struggled in this market. Stock down -6% WTD.

• SHA at a record number of project wins and a positive FY26 outlook. Stock is up 31.9% WTD (Nice!).

• XRO target price cut by Macquarie to $223 (long way off). Current price is $80. Analyst notes that Xero’s U.S. offering is 80% cheaper than the equivalent from rival Intuit. Stock has dropped -7%. Be aware they are having their results announcement tomorrow!

In the last week the portfolio has kept up with markets, accumulating +1.70% vs the ASX300 detracting -0.20% from 5th May to 13th May.

Investment Activity

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Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

Since the inception date of March 16th, the fund has generated a Net Return of 5.5%, providing a healthy spread against the ASX300 Accumulation Index’s 1.0% return.

While early days, the data provides a clear window into how the strategy is capturing value through active management, specific sector tilts, and a higher than normal cash weight for opportunistic buying.

Active Implementation & Trading Alpha

When calculating attribution, the formula assume a “static” portfolio at the start of the month. This does not take into account the active management over the month. This is important to consider since there was a 50% cash weight at the start of April which was deployed progressively.

This month, the Buy & Hold Active Return of 0.09% was minimum compared to the actual NAV Return of 8.76%. This means there is a 6.49% Trading Effect. It represents the value added through active management intra-month.

With a lower Average Turnover of 26.7%, the portfolio is quite resilient with all the current market volatility.

Portfolio Attribution

Below is a break down the performance relative to the benchmark. Otherwise known as Brinson Factor Attribution. It reveals whether our returns are coming from good stock picking or good asset/sector allocation.

The most significant move remains the heavy overweight in Technology (19.1% vs. 2.1%), which contributed a 1.7% Allocation Effect. Being in Technology was a benefit, just didnt have enough of the right stocks (-0.2% Selection Effect)

Beyond the headline tech bets, stock selection in Basic Materials contributed 0.6% while the avoidance of Healthcare’s entirely yielded +0.5% in Selection Effect.

An average Cash position of 29.5% created a -0.7% Allocation drag. We started with ~50%. While this impacts relative performance in a rising market, it remains a vital tactical tool for future deployment. The lesson here is to deploy more actively.

Portfolio Characteristics & Risk Metrics

The portfolio’s fundamental metrics were also reviewed regularly. This is for risk management and also to ensure it aligns with expectations. The current profile favours the mid-cap sweet spot, with the majority of companies between $1Bn to $5Bn in market cap.

Monitoring liquidity is also important, assessing how quickly we can liquidate the portfolio in case of a drawdown. Considering a 30% Average Daily Volume (ADV), the portfolio has a Days to Exit of 5 days. This is due to the small FUM size.

Other statistics included the following:

• Weighted Avg Mkt Cap: $5,611m, smaller than the $ 9,713m of the ASX300.

• WA Beta (1Y): 1.19, indicating a portfolio is more sensitive to the market.

• WA P/E Ratio: 21.9x, slightly higher than the ASX300 19.9x trailing PE. Portfolio is slightly more expensive the growthy style.

  

Sector positioning is monitored daily to understand where the biggest over or underweights are compared to the benchmark. At the end of the month, the largest overweight was Technology (+22.7% ) while the Financials (-18.9%) was the largest underweight.

While performance of Financials was similar between the portfolio and the benchmark (2.3% vs 2.9%), a slightly position in Financials would have likely lowered the negative Allocation Effect

Key Contributors & Detractors

The portfolio was driven by growth in Technology and Consumer services. While the actual NAV increased 8.8%, the simple stock contribution uses the prior end of month weight and the current month’s stock performance.

This ensures that we do not include the trading activity over the month, and overestimating the contribution to return.

The specific positions that were the drivers of the monthly return, by contribution:

• Megaport (MP1): Largest holding at 7.1%, returning 26.3%. Contribution of 1.9%

• Zip (ZIP): A 2.5% position returning 56.8%. Contribution of 1.4%

• Ora Banda Mining (OBM): A 6.0% position returning 12.8%. Contribution of 0.8%

Outlook & Strategy

The 6.6% absolute return since inception is a fantastic start given the current environment. It validates the positioning at the moment. The focus for the coming month will be; deploying more dry powder, identifying re-rating candidates, and perhaps some repositioning of the weights and/or profit taking of well run positions.

Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.

• Bal Start: $1,065,603

• Bought None

• Sold: None

• Bal End: $1,068,275

• Cash: $181,562

Market Commentary

The US market ended the month strong. The S&P 500 (+1.02%) and Nasdaq (+0.89%) surged to fresh all-time highs driven by earnings results from tech. Alphabet’s shares jumped nearly 10% following a massive beat in Google Cloud revenue and an increased capex outlook. Broader market breadth is solid with the VIX also down -10% indicating risk on sentiment.

The ASX ended its losing streak rebounding +0.74%. Materials led the pack (+2.1%), with Liontown Resources rallying +12.3%. A record high. Large caps BHP and Rio Tinto also showed gains. Most sectors finished in the green, except for Financials (-0.3%). It is only the start of the month so a lot can change. Tuesday, RBA day, will be one to watch.

Portfolio Commentary

The portfolio enjoyed a slight recovery today. WDS was down (-1.1%) while WTC (+2.4%) rode the tech tailwind from the US (thank god). COL was up (+3.7%) after their Q3 update with a 5.7% increase in volume-led sales growth (ex-tobacco). eCommerce sales posted a fantastic 24.8% growth in sales. The online business now represents 13.6% of total revenue.

Other tech holdings 360 (-0.94%), XRO (+0.66%) and MP1 (-2.4%) had mixed experiences. On the downside, SKS (-3.44%) and PC2 (-2.79%) were the worst performers. Interestly, while JDO and HMC are rate sensitive to a “higher-for-longer” environment ahead of Tuesday’s RBA meeting, one would expect them to fall. And yet they were up 1.75% and 0.40%, respectively.

Investment Activity

Did not trade.

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Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.