ABRDN Australia Equity Fund Q1 2025 Commentary: Underperforming Benchmark Amidst Sell-Off in Quality Names

The ABRDN Australia Equity Fund returned -1.43% in Q1 2025, slightly underperforming the ASX 200 Index's return of -1.24%. The underperformance was mainly due to a rapid sell-off in quality stocks and a shift to defensive stocks.

The ABRDN Australia Equity Fund returned -1.43% in Q1 2025, slightly underperforming the ASX 200 Index's return of -1.24%. The underperformance was primarily attributed to a rapid sell-off in quality stocks and a shift to defensive stocks. This period saw significant market volatility driven by geopolitical tensions and economic uncertainties [1].

The Australian sharemarket finished higher on 27 May 2025, tracking a rally in European markets overnight after US President Donald Trump delayed his threat to impose 50% tariffs on the European Union. The benchmark ASX 200 rose 0.56% to close at 8,407.60, with six of 11 sectors finishing in the green [1].

The biggest movers included copper miners Capstone Copper (+6.8%) and Sandfire Resources (+3.1%), driven by the closure of a rival mine in the Democratic Republic of the Congo and a potential takeover announcement by MAC Copper. The tech sector (+1.2%) was the largest gaining sector, led by Wisetech Global (+2.2%), Xero (+1.5%), and TechnologyOne (+1.0%). Big banks also saw gains, with CBA (+0.8%) nearing an all-time high and Westpac (+1.7%), NAB (+0.9%), and ANZ (+1.4%) rising [1].

Legal stoushes included TerraCom (+7.1%) settling an ASIC lawsuit for $7.5 million and paying $1 million in legal costs, and ASX Ltd (+0.1%) losing a Federal Court ruling in its bid to access 12 legally privileged documents. AMP (-1.5%) will defend a class action lawsuit alleging excessive superannuation fees [1].

Other notable news included DXN (+10.0%) signing a $2 million contract with DP World, Elders (+2.6%) seeing a target price reduction by Citi, and Telstra (+0.4%) reaffirming its FY25 guidance and launching a 'Connected Future 30' strategy. BHP (+0.2%) will open an AI hub in Singapore, and ALS entered a trading halt after posting a fall in underlying profits and announced a $350 million raise and $40 million share purchase plan [1].

Upcoming events include the Australian Bureau of Statistics reporting monthly consumer price index figures on Wednesday, the Reserve Bank of New Zealand making a cash rate and monetary policy statement at 12pm, and Treasury Secretary Steven Kennedy addressing an Australian Business Economists Event in Sydney at 12:15pm. Several companies will host annual general meetings, including Yancoal, Life360, Eagers Automotive, Droneshield, and Vulcan Energy [1].

References:
[1] https://www.capitalbrief.com/briefing/asx-finishes-higher-tracking-european-rally-6adeecc5-2a6b-4cf0-b8b7-4e73c10d6b8e/