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Hedge Clippings | 28 November 2025 At the risk of sounding like a broken record, the chances of a rate cut in December - and probably well into 2026 - took another blow this week when the ABS released October's first full monthly CPI number. Even though the actual number for the month was flat, or just 0.3% seasonally adjusted, the 12-month result of 3.8% (or 3.9% seasonally adjusted) was a shocker. The RBA's preferred measure was a more reasonable, but still upward-trending, 3.3%. Stating the obvious, Treasurer Jim Chalmers accepted that the result was "higher than we would like" before trying to deflect the criticism by saying that it was significantly lower than when the government took office. However, having claimed that the economy (and inflation) had turned the corner just 5 months ago, the latest result was the fourth consecutive monthly rise since June's result of 1.9%. So looking forward to the RBA's decision on the 10th of December, one would have to assume "no change" at best, but one has to wonder if the board aren't regretting their most recent rate cut in August, and if it was premature - as suggested at the time by Hedge Clippings' expert fund managers Renny Ellis from Arculus, and Nick Chaplin from Seed Funds Management. We'll check back in with them next week to get their take on what they think is in store, including if they think October's flat result for the month is a glimmer of hope, either for homeowners or Jim Chalmers. Meanwhile in the US the gyrations in expectations for a cut by the FED continue, with financial markets pricing in an 84.9% probability of a cut of 0.25% in December according to CME's FedWatch tool, and backed up by data showing a combination of increasing ongoing jobless claims, at the same time as consumers' assessment of the labour market is continuing to fall, as shown in the chart below. Meanwhile, we received multiple responses and questions surrounding last week's table showing the relative performance of the Australian Small/Mid Cap sector as selected and filtered using FundMonitors' quant Star Ranking process, and the 10 of funds making up the top/bottom of the 97-member peer group. We have reproduced last week's table as a chart to emphasise the differences. Each fund in the top group was selected based on scoring 4 or 5 Stars consistently over all time periods. Conversely, the bottom group consistently scored only 1 or 2 Stars. Obviously, there was a logical difference in average annualised performance between the top and bottom 10 funds in each group, but the extent was surprising. Firstly, selecting (or avoiding) funds based on consistent past performance is key, even if past performance is no guarantee in the future. It is simply the best indicator available. Secondly, "average" is just that, and makes a case for passive or index investing. Thirdly, the market's return (and particularly the ASX Small Ordinaries Index) over the past 1, 2 and even 3 years has been anything but ordinary. Interestingly, performance was more important than risk. Filtering out top-performing funds that had drawdowns in negative years, such as 2022 or 2018, resulted in a significantly lower average return. News | Insights New Funds on FundMonitors.com Investment Perspectives: Maybe it's not "just like 1999" | Quay Global Investors Market Commentary | Glenmore Asset Management October 2025 Performance News Argonaut Natural Resources Fund Skerryvore Global Emerging Markets All-Cap Equity Fund Equitable Investors Dragonfly Fund Insync Global Quality Equity Fund |
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