In a world chasing momentum, we're holding the line.

If you’ve seen Braveheart, you’ll remember the moment: William Wallace stands his ground, urging his countrymen to wait as the English cavalry charges. The instinct is to act, to react, to swing — but the command is to hold. To trust the plan.

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​As someone with proud Scottish heritage, that scene resonates. And it’s not just cinematic — it’s a powerful metaphor for moments like this in investment markets.

 

The Commonwealth Bank (CBA) has recently become the first Australian company to hit a $300 billion market cap. It now makes up more than 10% of the ASX 200. It’s the most widely held stock in the country — and rightly so. It’s a great business.

 

But we don’t hold it.

 

Not because we wanted to make a point — but because it didn’t meet the criteria of our strategy. Our approach is rules-based, tax-aware, and focused on delivering sustainable after-tax income — without sacrificing medium- to long-term total returns. CBA’s projected net tax benefit and valuation fell outside our investment criteria.

 

History shows that when share prices run well ahead of fundamentals, mean reversion eventually follows. These are the moments that test conviction — when reducing tracking error or hugging the benchmark can seem tempting. But we’re not here to mirror the index. We’re here to deliver sustainable, tax-effective income and medium- to long-term total returns in excess of the benchmark. That means avoiding stretched valuations when the trade-off compromises our core objective. We’re not in the business of timing sentiment shifts — we’re in the business of staying disciplined and delivering outcomes that matter to our investors.

 

That conviction recently struck a chord with a long-time follower of our strategy — a new investor who told us that our decision not to hold CBA was what gave them the confidence to invest. Feedback like that matters, especially as our fund approaches its 3-year mark.

 

​    We're staying true to our investors - those who rely on sustainable, tax-effective 

    income and value consistency over market noise. 

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The truth is, our strategy has been validated not just over the last 32 months, but through nearly 25 years of index data via the Hamilton12 Australian Diversified Yield Index, calculated by S&P Dow Jones Indices. Over that period, the strategy has delivered:

 

​• Higher after-tax income than the S&P/ASX 200

 

• Comparable risk to the S&P/ASX 200

 

• Superior medium- and long-term total returns compared to the S&P/ASX 200

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We’ve seen what happens when equity income strategies drift. Some overreach for yield at the expense of total returns. Others sacrifice income entirely in the pursuit of short-term benchmark alignment. Style drift is easy. Discipline is hard.

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We’re staying true to our investors — those who rely on sustainable, tax-effective income and value consistency over market noise. They’ve backed us to stick to our process, not to chase headlines.

So when we say we’re holding the line, we mean it. Not just as a phrase from a movie — but as a philosophy. As a commitment to the people we manage money for. And as a reminder that meaningful results come from sticking to a process — especially when it’s tempting to break ranks.

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We know what we stand for. And we’ll keep doing just that.​​​​​​​​​​​​​​​​​​