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Hedge Clippings | 06 March 2026
This week we interviewed two small cap managers via Zoom: Dean Fergie from Cyan Investment Management, and Martin Pretty from Equitable Investors, to get their take on the recent reporting season, which in a word, if you hadn't noticed, was volatile. You can view the video here, or from the summary below. Wilsons Advisory noted when only halfway through reporting season that: "Even modest earnings surprises triggered double-digit share-price moves, reflecting stretched valuations, shifting sector leadership, and heightened sensitivity to forward guidance rather than historical results. Several large-cap companies moved sharply on the day of their results, with investors reacting quickly to any deviation from expectations. By the end of the month, as reporting drew to a close, the volatility and market's reactions had only increased, with an overall backdrop of the negative effects of AI - or at least concerns about overly stretched valuations as a result of the euphoria of the past couple of years since Chat GPT and others changed the world as we knew it, along with the ongoing strength of rare earths and precious metals, and the sagging price of Bitcoin and other cryptocurrencies. The consensus - in the true sense of the word as both Dean and Martin were each in agreement on almost all points - was that many companies with "stretched" valuations didn't front up to investors' expectations. On the upside, companies which had possibly been considered boring, or not on the AI wagon, caught the market's attention. The discussion ranged not only from "what's" driving the market, but also the "who" - to what extent are index funds and program trading having an outsized effect, and how much influence are short terms traders seeking a quick killing having? In any event, the ASX 200 total return as a whole rose by 4.11%, taking it to +16.19% for 12 months, (whilst the more volatile Small Ordinaries fell by 2.8%), or the S&P 500 which fell by 0.76% in February, but also rose by 16.99% YoY. From a fund manager's perspective it was either a difficult, or spectacular month, along with plenty in between, based on the ~30% of funds that have reported to date, with returns ranging from -11% through to +11%, further emphasising our point from last week that active management can have an outsized effect on investors returns - provided you choose the right manager, with the right strategy, and at the right time! We originally scheduled the video with Dean and Martin before the US and Israel unleashed their joint air attacks on Iran last Saturday. Since then of course global volatility and uncertainty has also been unleashed, creating a whole different set of uncertainties, and possibly some opportunities for investors and fund managers alike. Uncertainty flowed through to the RBA as well, with Governor Michele Bullock keeping her options open on the chance of a rate rise in less than two weeks time, ahead of the next monthly CPI number due on 25th of March. However, in the current global environment, those two weeks leave an awful lot of variables, and potential outcomes, which could come into play. News | Insights Manager Insights | Cyan Investment Management & Equitable Investors Data demand heats up | Magellan Investment Partners February 2026 Performance News |
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