Chester Asset Management provided a performance update for the Chester High Conviction Fund covering October 2025, outlining results, market conditions, and portfolio activity during the period.
Performance Overview
For October, the Fund recorded a return of 0.8% after fees, compared with a 0.4% rise in the S&P/ASX 300 Accumulation Index.
Over the 12 months to 31 October 2025, the Fund returned 16.4% after fees, relative to a 12.7% return for the benchmark.
Market Environment
The manager noted a moderation in global risk appetite during October following commentary from the US Federal Reserve indicating that a December rate cut was not assured. While balance sheet tightening in the US was expected to conclude, ongoing inflation pressures in both the US and Australia continued to influence interest-rate expectations.
In Australia, persistent inflation removed expectations for near-term rate cuts, contributing to sector rotation away from small caps, consumer discretionary stocks, and REITs toward areas supported by earnings momentum. The manager also observed that equity valuations appeared less influential during the period, with earnings direction remaining the dominant driver of share prices.
Gold and precious metals experienced strong performance earlier in 2025, with some consolidation emerging in October. Structural allocation to gold across parts of the wealth management sector was noted as a potential longer-term support.
Portfolio Review
During the month, portfolio performance was supported by selected resource and gold exposures, following positive operational updates and improved production outlooks. The manager also cited corporate activity within the portfolio that contributed to performance.
Underperformance during the month was attributed to softer quarterly updates from some holdings and stock-specific factors, including project ramp-up timelines and market-related selling pressure. The manager indicated that several affected holdings continue to be assessed on a longer-term earnings and cash-flow basis.
The portfolio remained diversified across sectors, with positioning informed by valuation considerations, balance-sheet strength, and medium-term earnings potential.
Outlook
The manager commented that a number of portfolio holdings have experienced challenging periods over the past year. While valuation alone has not driven near-term performance, the manager expressed cautious optimism that conditions may improve for several of these companies over the next 12 to 18 months, subject to operational delivery and broader market conditions.
This update is provided for general information purposes only and reflects commentary supplied by the investment manager.
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Enquiries
Investors seeking further information or access to the full report may contact Pacific Private Asset Management.
Past performance is not a reliable indicator of future performance.