The Switzer Dividend Growth Fund – Active ETF (SWTZ or the Fund) portfolio delivered a grossed-up income return of 0.53% during the month and 7.08% over the past 12 months, compared with the benchmark’s grossed-up income returns of 0.51% and 4.47% respectively.
The Resources sector continued its strong performance from the previous month, despite mixed readings from iron ore, copper and aluminium prices. However, these positive developments were offset by broad-based weakness, led by sharp declines in Information Technology and Financials sectors.
Within the Fund, standout performers included Qube Holdings (QUB) and Orica (ORI). QUB’s share price surged when Macquarie Asset Management launched a non-binding takeover proposal. Takeovers of businesses like QUB are often seen as bittersweet. On one hand, QUB’s potential exit from the ASX means that investors will no longer have access to its unique assets. On the other hand, it is pleasing to see a bidder recognise what Vertium Asset Management (Vertium) considers to be the real value of QUB. If a takeover is completed, it should release $395m (5% of market value) in trapped franking credits to shareholders.
ORI rose after the company released its full-year 2025 financial results and revealed a 10% earnings increase, surpassing analysts’ expectations. This profit increase was fuelled by heightened demand for the company’s advanced explosive technologies and premium products in the mining sector, alongside improved margins from digital blasting solutions and a strategic shift toward higher-value offerings. The positive market reaction was further supported by the company raising its medium-term return on net asset target from 13.5% to 15.5%.
The recent market volatility created attractive entry points into high-quality businesses such as Netwealth Group (NWL). NWL is a major Australian wealth management platform business that has successfully grown its market share of the platform market from 4% to 9% in the last five years. The company continues to see strong net flows onto its platform, winning 35% share of all net flows in the 2025 financial year. NWL’s share price has fallen 25% since the disclosure of its $101m exposure (1.4% of market cap) to the collapsed First Guardian fund. Netwealth has denied wrongdoing, attributing losses solely to fraud. Vertium views the sell-off as a market overreaction, especially when the company’s balance sheet has $149 million of net cash as at 30 June 2025.
The Australian economy showed signs of mixed strength in November: annual inflation increased to 3.8%, driven by rising housing and energy costs, after the switch to a new monthly CPI (inflation) series. The Reserve Bank of Australia (RBA) responded by holding the cash rate at 3.60% at its meeting on 4 November, citing persistent inflation and the uncertain impact of previous rate cuts.
The broader market remains susceptible to heightened volatility, with pockets of significant overvaluation persisting across certain sectors and securities. The Fund continues to adopt a disciplined approach by focusing on high-quality, undervalued opportunities with strong fundamentals. By maintaining a diversified portfolio and prioritising income-generating investments, the Fund is strategically positioned to deliver attractive income streams and sustainable long-term returns. This approach also aims to achieve lower volatility than the benchmark, providing investors with a resilient and balanced investment option in an uncertain market environment.
DISCLAIMER: AGP Investment Management Limited (AGP IM) (ABN 26 123 611 978, AFSL 312247) is a wholly owned subsidiary of Associate Global Partners Limited (AGP) (ABN 56 080 277 998), a financial institution listed on the ASX (APL). AGP IM is the Responsible Entity and Vertium Asset Management Pty Ltd is the investment manager of Switzer Dividend Growth Fund - Active ETF (ARSN 614 066 849) (the Fund).
Any references to ‘We’, ‘Our’, ‘Us’, or the ‘Team’ used in the context of the portfolio commentary, is in reference to Vertium Asset Management Pty Ltd, as investment manager for the Fund.
This material has been prepared for general information only. It does not contain investment recommendations nor provide investment advice. It does not take into account the objectives, financial situation or needs of any particular individual. Investors must, before acting on this material, consider the appropriateness of the material.
Neither AGP IM, AGP, their related bodies corporate, entities, directors or officers guarantees the performance of, or the timing or amount of repayment of capital or income invested in the Fund or that the Fund will achieve its investment objectives. Past performance is not indicative of future performance.
Any economic or market forecasts are not guaranteed. Any references to particular securities or sectors are for illustrative purposes only and are as at the date of publication of this material. This is not a recommendation in relation to any named securities or sectors and no warranty or guarantee is provided that the positions will remain within the portfolio of the Fund.
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