October, 2025
Monthly Commentary
Paradice Australian Equities Team
Paradice Australian Equities Fund October 2025 Commentary
Performance
The portfolio returned -10 bps, and underperformed the ASX200 by 49 bps over the month net of fees.
Key Contributors/Detractors
Positives
- Ansell (OW) – outperformed on a guidance upgrade given positive operating conditions prevailing
- CSL (UW) – underperformed on a downgrade to FY26-28 earnings citing flu vaccine China albumin challenges
- Alcoa (OW) – outperformed on higher aluminium prices
Negatives
- Treasury Wine Estates (OW) – underperformed on guidance withdraw post weak China consumption data. We have reduced position size.
- ANZ (UW) – outperformed on better cost guidance
- Electro Optic Systems (OW) – underperformed post a period of strong performance
Market Review
The US S&P 500 Total Return Index rose 2.3% (USD) in October, supported by a solid earnings season—particularly among Technology and Banks. The Federal Reserve cut rates by 25 bp amid a softer labour market and moderating economic growth, while inflation remained contained. A US-China meeting produced some positive trade outcomes, though tariff risks and the ongoing US government shutdown continued to cloud the outlook.
The S&P/ASX 300 Total Return Index advanced just 0.4% (AUD), restrained by a more hawkish domestic policy tone. The RBA signalled greater concern after underlying inflation accelerated to 3.0% y/y in the September quarter-at the top of its 2–3% target range-even as the unemployment rate rose to 4.5%.
The Bloomberg Commodities Index gained 2.9% (USD). Lithium carbonate climbed 11% on improving battery demand; copper (+5.8%) and iron ore (+3.7%) strengthened on resilient global growth; and gold (+3.7%) rose on continued central bank buying (all in USD).
Outlook
We remain moderately cautious on short-term market prospects due to a combination of exuberance around artificial intelligence 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 reduced our overweight positions in gold (through Newmont) and rare earths (through Lynas) given material outperformance recently.
The portfolio’s active positioning by sector as of 31 October 2025 is as follows.
Top 5 active positions (Overweight)
- BHP
- Seek
- Insurance Australia
- Newmont
- Ansell
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; 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).
It may contain certain forward looking statements, opinions and projections that are based on the assumptions and judgments of Paradice with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of Paradice. Because of the significant uncertainties inherent in these assumptions, opinions and judgments, you should not place undue reliance on these forward looking statements. For the avoidance of doubt, any such forward looking statements, opinions, assumptions and/or judgments made by Paradice may not prove to be accurate or correct. You should perform your own research and due diligence, consult your own financial, legal, and tax advisors before making any investment decision with respect to transacting in any securities covered herein. Specific securities identified herein are not representative of all securities purchased, sold, or recommended by the Fund previously or in the future. Following publication of this material, the investment teams at Paradice may transact or continue to transact in any of the securities covered herein, and may be positive, negative or neutral at any time hereafter regardless of our initial conclusions, or opinions.
The content of this publication is current as at the date of its publication and is subject to change at any time. It does not reflect any events or changes in circumstances occurring after the date of publication.
You should consider your own needs and objectives and consult with a licensed financial adviser when deciding whether the Fund is suitable for you. Past performance should not be taken as an indicator of future performance. You should also read the current Product Disclosure Statement before making a decision about whether to invest in this product and the Target Market Determination available at www.paradice.com . A Target Market Determination is a document which describes who this financial product is likely to be appropriate for (i.e. the target market), and any conditions around how the product can be distributed to investors. This material is not to be copied, reproduced or published at any time without the prior written consent of Paradice. Neither Paradice, Equity Trustees, nor any of their respective related parties, directors or employees, make any representation or warranty as to the accuracy, completeness, reasonableness or reliability of the information contained in this publication or accept liability or responsibility for any losses, whether direct, indirect or consequential, relating to, or arising from, the use or reliance on any part of this material.
Copyright© 2025 Paradice
Contributors:
Julia Weng