November, 2025
Monthly Commentary
Paradice Australian Equities Team
Paradice Australian Equities Fund November 2025 Commentary
The portfolio returned -285bps,and underperformed the ASX200 by 19bps over the month net of fees.
Key Contributors/Detractors
Positives
- Commonwealth Bank (UW) – underperformed post weaker Net Interest Margin (NIM) trends
- Newmont (OW) – outperformed on higher gold prices
- Alcoa (OW) – outperformed on higher aluminium prices
Negatives
- Xero (OW) – underperformed on risk off sentiment across the technology sector.
- Seek (OW) – underperformed potentially due to risk-off sentiment and expectations that interest rate cuts would be pushed out (recent employment data has been strong).
- CSL (UW) – modest recovery post a period of under-performance
Market Review
The US S&P 500 Total Return Index returned 0.3% (USD) in November, albeit intra-month it declined by 4.5% as concerns about Artificial Intelligence (AI) over-valuation ramped up in the lead up to Nvidia earnings release. The US came out of its longest government shutdown after 43 days with little economic news released during that time. After two cuts earlier in the second half of 2025, markets are increasingly pricing another Fed cut in December – a backdrop that supported gold and flows into equities and commodities.
The S&P/ASX 300 Total Return Index declined by 3.0% (AUD), restrained by a more hawkish domestic policy tone and by Banks underperformance. The RBA left the cash rate unchanged at 3.6% given persistent inflation risks. A strong October CPI of 3.8% (partly due to energy rebates expiring) further reduced the probability of near-term easing.
Within the ASX200, the Materials sector (+1.6%) were clear outperformers as copper and iron-ore held firm and gold rallied. Defensive sectors like Consumer Staples and Healthcare outperformed in the softer market.
Information Technology / high-growth stocks were notable underperformers as the market grew nervous around valuation. Banks dropped 7.0% after CBA’s 1Q26 commentary drove negative forward earnings revisions across the sector on a weaker NIM outlook. Westpac rose on revealing a better capital position in its FY25 release. ANZ’s result showed emerging revenue pressures, and NAB’s increased business banking competition.
Outlook
We remain moderately cautious on short-term market prospects due to a combination of exuberance around AI stocks, extended valuations in equities, and emergence of softer consumer and employment conditions in the US, just as tariff policies kick into effect.
Portfolio Positioning
We have increased our Materials positioning as the outlook for iron-ore and aluminium prices look increasingly positive. At the same time, we have reduced the portfolio’s exposure to high beta names selectively as the market has de-rated these in response to AI-driven valuation concerns.
The portfolio’s active positioning by sector as of 30 November is as follows.
Top 5 active positions (Overweight)
- BHP
- IAG
- Newmont
- Macquarie
- Seek
The portfolio is modestly defensively positioned given the confluence of: 1) persistent momentum in the way of PE expansion with no apparent catalyst to derail this; albeit 2) extended valuation as a starting point; 3) signs of soft employment and consumer and housing demand in US.
For any other questions in relation to the portfolio, please contact distribution@paradice.com.
For further details on fund positioning please refer to the Paradice Australian Equities Quarterly Fact Sheet.
Disclaimer:
This material is prepared by Paradice Investment Management Pty Ltd (ABN 64 090 148 619 AFSL No 224158) (Paradice, we or us) to provide you with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information.
This material is not intended to constitute advertising or advice (including investment advice or security, market or sector recommendations) of any kind. In addition, this material represents only the views of the Paradice Australian Equities team as at the time of release and is not intended, and may not, represent the views of Paradice or any of the other investment teams at Paradice.
Equity Trustees Limited (ABN 46 004 031 298, AFSL No. 240975) (Equity Trustees) is the responsible entity of, and issuer of units in, the Paradice Australian Equities Fund (Fund). Equity Trustees is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX:EQT).
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Contributors:
Julia Weng