A Message from Mike
Beneath the Surface: The Month the Market Changed Its Mind
Every few weeks someone still asks me, usually with the same half-smile, whether I am still bullish. You already know the answer. Yes. I always am, and I make no apology for it. But being a bull does not mean being blind, and July was a month that rewarded looking past the headline number to what was actually happening underneath it.
A quiet headline over a loud engine room.
On the surface, July was one of the calmest months of the year. The S&P 500 finished essentially flat, down about 0.1%, and the Dow actually edged up 0.3% to sit near a record high. Glance at that and you would think nothing happened. But the tech-heavy Nasdaq fell MICHAEL SMITH Portfolio Manager & CEO around 3.2% over the same weeks, and that gap is the whole story. When one index is flat and another is down three per cent, the market is not sleeping — it is rotating.
The handover from hardware to software.
What rotated was leadership within the technology trade itself. The AIhardware names that had carried the market for two years took a hard breather: Taiwan Semiconductor, our largest single holding, gave back about 15% after an extraordinary run, and the broader chip complex went with it. Yet in the very same month Microsoft climbed about 20% and Amazon rose around 14%, both on the back of strong lateJuly earnings. The money did not leave the market. It simply handed the baton from the companies that build the picks and shovels to the ones already turning them into profit.
Why the barbell earns its keep.
This is exactly the shape of market our construction is built for. On one side sits the growth engine — Nvidia at 7.0% of the Global Growth portfolio, Advanced Micro Devices at 3.9%, ASML, and the platform businesses in Alphabet (8.9%), Amazon (6.3%) and Microsoft (6.6%). On the other sits the ballast — Berkshire Hathaway (7.7%), Costco (7.0%), Visa, Procter & Gamble and McDonald’s, the businesses people keep paying whatever the weather. In July the semiconductors wobbled and the software and staples did the carrying. A portfolio betting the house on one leg of the AI trade would have felt that 15% fall in full. Ours gave back 1.6%.
What I am watching, not worrying about.
Taiwan Semiconductor remains our anchor for a reason: at 9.6% it is our single largest position, and very little of the next decade gets built without its chips. A soft month does not change a thesis measured in years, and I would rather own the best business in a difficult neighbourhood, sized sensibly, than a lesser one for an easier night’s sleep. Meanwhile the quieter threads in the book Grumman on the defence side — keep reminding us that a wellbuilt portfolio does not need to guess the next headline to be ready for it.
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The index barely moved. Underneath it, the market changed its mind about who leads.
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So am I still bullish? Yes, and a month like July is part of the reason. The clients who do best from here will not be the ones who correctly called that chips would pause and software would surge in July — nobody does that reliably, month after month. They will be the ones who owned both, stayed invested, and let a rotating market do the work of moving them from yesterday’s winners into tomorrow’s. As always, thank you for your trust. It remains the thing we work hardest to deserve.
SHAREABLE: A flat month is never really flat — it is just a fight you did not have to watch.
The Advice Desk
The FY27 Head Start: The Cheapest Month to Get Organised
A new financial year has just ticked over, and with it comes the one window most people waste. June gets all the attention — the last-minute contributions, the scramble for receipts, the deadline panic. But almost everything that makes June stressful is cheaper, easier and more effective if you deal with it now, in the quiet of early FY27, ratherthan in eleven months’ time.
Your contribution caps have reset. The concessional (pretax) cap rose to $32,500 and the nonconcessional cap to $130,000 from 1 July 2026. If you left concessional cap unused in recent years and your total super balance was under $500,000 at 30 June 2026, carryforward contributions may still let you claim more than the annual cap. It is a genuinely useful lever, and one that is far easier to plan across a full year than to force through in a single June week.
The Australian backdrop. Locally, the ASX 200 rose about 2% in July, a fourth straight monthly gain led by energy and financials. The cash rate remains at 4.35%, with the RBA holding rates steady at its 11 August meeting. The broad point for members is unchanged: with the local market and the cash rate where they are, the structure of where you hold your money matters as much as what you hold inside it.
A question worth sitting with. If your income stopped for six months, would your plan bend or break? A new financial year is the natural moment to stress-test the defensive side of your position — your income protection, the fine-print definitions inside your cover, and whetherthe “default” insurance bundled into your super actually fits the working life you have now. Most people have never once checked.
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The cheapest financial-year housekeeping is the kind you do in the first month, not the last.
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Next Steps: If you are not sure where you stand on contributions or cover for FY27, a fifteen-minute conversation now is worth far more than a scramble next June. Reach out to the advice team and we will map it out with you.
The Investment Engine: July 2026
July’s central story was rotation without direction: the index finished roughly where it started, while leadership rotated hard from AI hardware into software and the broader market. The chip complex sold off — Taiwan Semiconductor about 15% — while Microsoft (about +20%) and Amazon (~14%) surged on earnings, and the Dow’s 0.3% gain against the Nasdaq’s 3.2% fall captured the split neatly. Here is how it read across the five portfolios. Weights below are actual portfolio weights as at 31 July 2026; onemonth returns are shown in the table on page 6.
Haven (Conservative) — Return 0.5%. Roughly 37% growth, 63% defensive. Thedefensive core did the heavy lifting: the bankhybrid sleeve (MQGPF 7.6%, NABPH 5.7%, MQGPD 5.6%) and the cash ETF AAA (7.2%) kept generating income, while the privatedebt holding MXT (5.3%) benefits from its floatingrate structure in a higherforlonger world. The infrastructure pairing of IFRA (6.8%) and VBLD (6.1%) provided realasset ballast against the equity noise, and the international sleeve felt July’s rotation only faintly.
Meridian (Balanced) & Summit (Growth) — Returns 2.0% and 2.2%. Balanced runs about 68% growth, Summit about 75%. Both lean on core US exposure through IVV (16.3% in Balanced, 18.2% in Summit) alongside Australian equities via A200 (10–11%). As the chip names paused, the quality tilt — QUAL and QHAL, a combined 12–14% — held up better than the more expensive growth exposure, which is precisely its job. The Nasdaq holdings (NDQ, HNDQ) gave back a little with the index.
Aurora (High Growth) — Return 2.1%. At roughly 84% growth, Aurora carries the most equity risk, led locally by A200 (11.8%) and AQLT (9.1%) and by a heavy international book (IVV 20.0%). In a month where leadership rotated rather than collapsed, the breadth of the international holdings mattered — the software strength offset the hardware softness rather than the portfolio relying on either alone.
Horizon (Global Growth) — Return 1.6%. Currency also played an important role in July.Because Horizon holds US assets but is priced in Australian dollars, the AUD/USD rate is always part of the story. The Aussie firmed over July, from about US 69.2 cents to US 70.3 cents — a rise of roughly 1.5%. A stronger Aussie is a mild headwind for unhedged US holdings, trimming their value in dollar terms, and that currency move accounts for much of the month’s small decline. Underneath the FX, the barbell told July’s story in miniature: our anchor Taiwan Semiconductor (9.6%) fell about 15%, while Microsoft (6.6%) jumped about 20% and Amazon (6.3%) rose around 14% on earnings, with cybersecurity holdings CrowdStrike (5.3%) and Palo Alto (2.6%) continuing to earn their place, and the ballast in Berkshire Hathaway (7.7%) and Costco (7.0%) doing its quieter work. A textbook month for why we hold the spread rather than the single bet.
Why we don’t hedge. We accept currency movement because, overthe long run, the Aussie dollar acts as a natural shock absorber: in a genuine global crisis it typically falls, lifting the value of your offshore assets at exactly the moment you need it most. July’s mild strengthening is the trade-off for retaining that potential defensive benefit during periods of global market stress.
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