Cadence Capital (CDM) investor relations material

Fund performance and yields

• CDM delivered a 24.0% YTD return and 22.2% over one year, outperforming the index by 18.7% and 15.4% respectively; since inception, annualized return is 11.2% versus 7.5% for the index.

• CDO achieved a 37.5% YTD return and 34.9% over one year, outperforming the index by 32.2% and 28.1%; since inception, annualized return is 24.0% versus 10.2% for the index.

• Both funds offer franked and gross yields for 2025 that are about three times higher than the All Ordinaries Index.

• CDM and CDO have paid substantial dividends since inception and maintain profit reserves covering over four years of dividends.

• Both funds trade at discounts to NTA: CDM at -12.7% and CDO at -6.3%.

Market and macroeconomic trends

• Long-term interest rates have risen sharply since 2022, with US rates peaking at 5.5% before easing to 3.75%.

• Australian CPI inflation stands at 4.2%, above the RBA's target, driven by housing and transport costs.

• The AUD has strengthened against major currencies over the past year.

• Market PE ratios remain elevated while EPS growth has been volatile.

• Persistent inflation, rising rates, and geopolitical uncertainty echo the stagflationary environment of the 1970s.

Investment process and philosophy

• Combines fundamental and technical research to identify value and time entries/exits.

• Fundamental analysis focuses on PEG, OCF, FCF yields, cash, and debt metrics.

• Technical analysis uses trend and volume indicators for both long and short positions, with strict risk controls.

• Short exposure is opportunistic, averaging 2–8% of FUM, with a maximum of 40%.

• Participates in a range of market opportunities including IPOs, placements, arbitrage, and block trades.