September 2025 Quarter in Review
The ASX 200 gained 3.59% for the quarter. The key drivers of the market expansion during the quarter were:
- strong performance from banks and financials
- notable names in healthcare rebounded post US announcement of tariffs
- resource strength due to supply disruptions and higher commodity prices
- a better-than-expected reporting season.
Notable performance detractors included:
- interest rate fears which were responsible for the sharp fall in early September
- unexpectedly high inflation numbers in late September likely delaying and further rate cuts
- soft earnings guidance from reporting period with companies paying higher dividends but cutting growth forecasts
The outlook for the December quarter is likely to be driven by the next interest rate cut. The next interest rate cut has been delayed by unexpectedly high inflation in late September but may still fall within the quarter.
State of Australia
The Australian economy continues to face headwinds and structural constraints. However, is showing signs of stabilisation. The Australian economic growth remains moderate with keys challenges consisting of weak productivity growth, global instability, volatile inflation causing interest rate uncertainty and housing affordability.
Limberg Asset Management Portfolio Positioning
The ASX200 market reached new all-time highs during the quarter extending the period of stretched valuations with price-to-earnings statistics significantly above long term average.
We continue to focus on building cash within portfolios and increasing exposures to assets with defensive characteristics while remaining alert to opportunities. To assist in building portfolio cash, we have been actively selling portions of stock at elevated prices which we will look for opportunities to reinvest in more certain earnings for the portfolios. One example of this process has been trimming some positions in MAF as the valuation stretch. We remain confident in its management and future prospects but believe there are currently better risk reward opportunities available in the market.
Income holdings in portfolios continue to deliver, recording another quarter of consistent monthly income with minimal signs of distress reported. With three interest rate cuts totalling 0.75% lower monthly payments are cycling through portfolios on balance we remain satisfied with the stability and consistence of income.
We would like to take the opportunity to thank you for your enduring trust and continued support. We are, as always, here to help and happy to discuss our investment principles with anyone that could benefit from our services.