Portfolio highlights

The Portfolio generated a positive return for the month, with global share markets recording modest gains in February, driven largely by European shares, while US and Asian markets delivered mixed outcomes. European shares were supported by improving business‑survey data, pointing to firmer growth momentum, alongside persistently low inflation.

Resolution Capital Global Listed Infrastructure Fund – The fund outperformed its benchmark by 0.8% in February. Stock selection in Utilities was again crucial, supported by rising electricity demand from hyperscale data‑centre developments. Entergy benefited from multibillion‑dollar investment agreements across its service regions, underpinned by long‑term data‑centre load growth. The broader infrastructure universe also continued to gain from strong demand for transmission and distribution assets, as digitalisation and power needs continue to grow. This environment rewarded high‑quality regulated operators with clear visibility on capital deployment and returns.

Bentham Global Income Fund — The Fund outperformed  its benchmark by 0.5%. Rising short-term yields pressured duration-sensitive sectors, particularly investment grade credit as markets pushed expectations of a Fed rate cut to later in the year. This occurs because when interest rates rise, the value of longer‑dated bonds and credit assets falls, making duration‑sensitive investments more vulnerable. Positive contributions came from assets involving global syndicated loans and global high yield, supported by strong demand, tight spreads and stable volatility.

Global shares (hedged) delivered positive returns, while currency movements detracted from unhedged outcomes.

In the United States, share markets eased slightly after reaching record highs in January. Whilst optimism on Artificial Intelligence ‘AI’ and strong corporate profit results remain supportive for Wall Street, President Trump’s tariffs provided turbulence after the US Supreme Court ruled against their legitimacy. President Trump responded with an immediate 10% global tariff that could rise to 15%. The threat of US military action against Iran was also a concern that led to a sharp rise in global oil prices. European shares made strong gains with business surveys showing solid growth prospects and inflation remaining low.

Chinese shares disappointed with investors taking profits after a strong rally over recent months. Concerns over China's subdued retail spending and the weak residential property market appear to be reviving. Japan’s share market surged to historic highs with the new government pledging tax relief for consumers.

Listed infrastructure performed strongly, and bond markets generated modest gains amid ongoing policy uncertainty and elevated geopolitical risk.

Australian Shares made strong gains driven by Materials which benefitted from rising gold, metal and oil prices and Financials with the large banks results beating expectations.

Australia’s economic data has been mixed with strong job gains but softer household spending. The key issue remains high inflation. Headline consumer inflation came in at 3.8% in the year to January. This may lead to another Reserve Bank interest rate hike after February’s move to raise the cash rate to 3.85%.