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Insights

Performance and market insights - February 2026

Market Insight
March 16, 2026

Performance summary

The CC Sage Capital Absolute Return Fund returned -3.47% in February versus the RBA Cash Rate return of 0.29%.*

The CC Sage Capital Equity Plus Fund returned 2.20% in February versus the ASX/S&P 200 Accumulation Index of 4.11%, leaving an underperformance of 1.91%.*

Contributors and detractors to performance

Over the month, the Sage Groups^ that contributed most to performance were Domestic Cyclicals and Resources while Yield and Defensives were detractors.

The largest positive contributors in the Domestic Cyclicals group were short positions in a range of discretionary retailers which sold off on the back of a 25 basis point interest rate hike earlier in the month. While in the Resources group, key positive drivers included a long position in BHP Group (ASX: BHP +16%) which delivered a strong result, and also the International Copper Study Group (ICSG) raising its copper production guidance by ~150,000 tonnes for the next two years. The copper optionality was the key re-rating catalyst, with investors increasingly viewing BHP as a leveraged play on the energy transition. A long position in Iluka Resources (ASX: ILU +26%) also aided performance, amid several policy announcements from the US and China, including China’s imposing export controls on rare earths.

On the negative side, within the Yield group, short positions in Westpac Banking Corporation (ASX: WBC +9.6%) and Commonwealth Bank of Australia (ASX: CBA +18.5%) were the main culprits as the whole Yield sector bounced on better-than-expected earnings results. A long position in Insurance Group Australia (ASX: IAG -12%) was relatively weak as the insurance industry was hit by higher-than-expected claims costs due to severe weather events and a softening in premium price growth.

Overall, share price volatility was significantly decoupled from fundamentals, with market reactions far outstripping any actual changes to earnings guidance. Within the Defensives group, the main drag was a long position in gaming company Light and Wonder (ASX: LNW -20%), which - despite delivering a strong earnings result - was sold off along with other gaming names globally. The sell-off was largely indiscriminate, fuelled by a thematic rotation out of software and technology as investors hedge against potential AI disruption across the board. Long positions in Goodman Group (ASX: GMG -6%) and ResMed (ASX: RMD -4%) were also dragged by soft sentiment despite solid results and in the case of ResMed, a material beat.

Read the fund reports for additional commentary

* 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.
This information is for professional and wholesale investors only and has been prepared by Sage Capital Pty Ltd ACN 632 839 877 AR No. 001276472 (‘Sage Capital’). Channel Investment Management Limited ACN 163 234 240 AFSL 439007 (‘CIML’) is the responsible entity and issuer of units in the CC Sage Capital Equity Plus Fund ARSN 634 148 913 and the CC Sage Capital Absolute Return Fund ARSN 634 149 287 (collectively ‘the Funds’). Channel Capital Pty Ltd ACN 162 591 568 AR No. 001274413 (‘Channel’) provides investment infrastructure services for Sage Capital and is the holding company of CIML. This information is supplied on the following conditions which are expressly accepted and agreed to by each interested party (‘Recipient’).
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This information contains general financial product advice only and has been prepared without taking into account the objectives, financial situation or needs of any particular person. It is intended solely for wholesale clients (including sophisticated investors) as defined under sections 761G and 761GA of the Corporations Act 2001 (Cth).

The information provided should not be considered personal advice, a recommendation, or an offer to invest in the Funds. Recipients should not rely on this information in making investment decisions. A Recipient should, before making any investment decisions, consider the appropriateness of the information, and seek professional advice.

Neither Sage Capital, Channel, CIML or their representatives and respective employees or officers (collectively, ‘the Beneficiaries’) make any representation or warranty, express or implied, as to accuracy, reliability or completeness of this information or subsequently provided to the Recipient or its advisers by any of the Beneficiaries, including, without limitation, any historical financial information, the estimates and projections and any other financial information derived there from, and nothing contained in this information is, or shall be relied upon, as a promise or representation, whether as to the past or the future. All investments contain risk. Past performance is not a reliable indicator of future performance.

For further information and before investing, please read the Product Disclosure Statement and Target Market Determination which are available from www.channelcapital.com.au/funds
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