Performance summary

The CC Sage Capital Absolute Return Fund returned 3.44% in August versus the RBA Cash Rate of 0.37%, an active return of 3.07%.*

The CC Sage Capital Equity Plus Fund returned 2.83% in August versus the S&P/ASX 200 Accumulation Index of 1.54%, an active return of 1.29%.*

August was a strong month for the Sage Capital portfolios. Seven of the eight Sage Groups^ contributed positively for the month in a market where stock dispersion was high, but stock reactions were more explainable than other recent reporting periods.

Reporting seasons are typically volatile, so ahead of August, Sage Capital compressed the size of some active positions, particularly in higher-risk stocks, to account for the step-up in volatility. This helped keep portfolio risk closer to target levels and positioned the team to rebuild exposure post reporting season, initiate some new positions and take advantage of excessive stock price reactions.

Domestic Cyclicals lead performance

The Domestic Cyclicals group was the largest positive contributor to performance driven by a range of short positions in discretionary retail names. Most companies delivered strong results, but across the board outlook statements were cautious with many retailers experiencing a decline in sales and higher input costs. This drove some earnings downgrades for next year as fears of further interest rate hikes and falling housing prices kept stocks under pressure. A long position in Ampol (ASX: ALD +8%) was also a positive contributor with the June half confirming the ongoing strength in refining margins and further synergies to come from the EG Australia retail site acquisition.

Gold outperforms across key long positions

The Gold group was another strong contributor to performance driven by a long position in Evolution Mining (ASX: EVN +32%) which delivered a strong result and offers a compelling mix of copper exposure, an attractive growth pipeline and a management team with a strong track record of delivery. Gold performance was also boosted by a long position in Genesis Minerals (ASX: GMD +44%). The company is finalising its strategic merger with Vault Minerals (ASX: VAU +40%), a transaction driven by clear operational synergies that will transform the combined group into a standout mid-cap Australian gold producer with significant scale and growth.

Strong contributors across Resources

The Resources group was another positive contributor to performance as we saw some high stock price dispersion between the winners and losers. Notable positive contributors included a long position in Iluka Resources Limited (ASX: ILU +14%), which reported strong results and signalled a recovery in mineral sands pricing after a few tough halves. Iluka has been making progress with its rare earths facility at Eneabba and announced its first offtake in July. Sage Capital continues to see the upside and believes the market is overly discounting its rare earths story. Although it did not report during the month, the second largest contributor to performance was a long position in Capstone Copper (ASX: CSC +19%). The company printed a clean quarterly result on the last day of July and is one of the few pure copper exposures left on the ASX, and the only one with significant growth options.

Growth exposure detracts this month

On the negative side, the Growth group was the only detractor during the month driven by a long position in Life360 (ASX: 360 -21%). Despite beating its first half results across most key lines, the stock fell when management reiterated rather than upgraded full year revenue guidance. The guidance implies the second half of 2026 will be skewed to growth in monthly active users and a seasonally stronger fourth quarter. While the market remains sceptical of the outlook, Sage Capital believes it is achievable and took the opportunity to top up its existing position after reducing active exposure heading into the result.

For more detailed commentary and analysis, view the latest performance reports:

• CC Sage Capital Absolute Return Fund monthly report
• CC Sage Capital Equity Plus Fund monthly report

* Past performance is not indicative of future performance. ^ Sage Capital uses a custom grouping system for long and short positions (Defensives, Domestic Cyclicals, Global Cyclicals, Gold, Growth, REITs, Resources and Yield). With a focus on the principal macro earnings drivers for each stock, Sage Groups allow for comparisons to GICS for selecting stocks within a sector.