Cadence Fund Surges 7.9% in FY25, Boosts Dividend as Gold Stocks Shine

Solid Annual Performance Amid Market Headwinds

Cadence Opportunities Fund Limited (ASX, CDO) has released its full year results for the financial year ending June 30, 2025, reporting a 7.9% increase in fund value and a profit after tax of $1.5 million. Chairman Karl Siegling highlighted that the fund’s performance was notably strong in the second half of the year, rebounding with a 9.1% gain that helped offset earlier underperformance.

The fund’s success was largely driven by key contributors such as Evolution Mining, which surged 123% over the past year, significantly outpacing the 44% rise in the Australian dollar gold price. Other notable performers included Netflix, Echo IQ, Robex Resources, QBE Insurance, Boss Energy, New Gold, Turaco Gold, and Guzman y Gomez. Conversely, some holdings like Step One Clothing, Whitehaven Coal, Alcoa, and Capstone Copper detracted from returns.

Dividend Boost Reflects Confidence

In a positive signal to investors, Cadence declared a fully franked final dividend of 7.0 cents per share, up 0.5 cents from the interim dividend, bringing the full year payout to 13.5 cents per share. This equates to a 7.8% fully franked yield or an 11.1% gross yield based on the share price at announcement. However, shares currently trade at a 15% discount to the fund’s pre-tax net tangible asset value (NTA) of $2.03, which adjusts the yield to 6.7% fully franked or 9.5% gross on an NTA basis.

The fund encourages shareholders to participate in its dividend reinvestment plan (DRP), which offers an efficient way to increase holdings. The company also plans an on-market buy-back of shares issued under the DRP when trading below NTA, aiming to support share price stability and value.

Navigating a Complex Economic Landscape

Looking ahead, Karl Siegling painted a cautious yet opportunistic outlook. Global markets remain unsettled by slowing growth, political tensions, and central bank policy shifts. Recent interest rate cuts by the Reserve Bank of Australia and anticipated moves by the US Federal Reserve reflect attempts to stimulate economies, but longer-term inflation risks persist due to fiscal deficits and monetary easing.

These dynamics may bolster gold’s appeal as a safe haven, underpinning Cadence’s continued emphasis on gold equities, which currently trade at relatively attractive valuations. Meanwhile, the broader market faces challenges with price-to-earnings expansions outpacing earnings growth, potentially leading to increased volatility and trading opportunities that the fund aims to exploit through its disciplined investment process.

Overall, Cadence Opportunities Fund’s FY25 results underscore a resilient strategy focused on value and selective exposure, particularly in gold mining, amid a shifting economic environment.