How Did Ophir High Conviction Fund Double Profit and Outperform by 9.6%?
Ophir High Conviction Fund reported a robust financial year ending June 2025, with net assets rising nearly 15% and operating profit more than doubling. The Fund’s concentrated portfolio strategy delivered a 24% net return, comfortably outperforming its benchmark.
- Net assets increased 14.68% to $735.6 million
- Operating profit jumped 140.85% to $154.5 million
- Fund outperformed benchmark by 9.6% with 24.0% net return
- Distributions rose significantly to 27.11 cents per unit
- Portfolio focused on Australian listed companies outside ASX50
Strong Financial Performance
The Ophir High Conviction Fund (ASX, OPH) has delivered an impressive set of results for the year ended 30 June 2025, reporting a 14.68% increase in net assets to $735.6 million. Operating profit more than doubled to $154.5 million, reflecting a 140.85% rise compared to the prior year. This surge was driven by a marked improvement in portfolio performance, with the Fund achieving a 24.0% net return, significantly outperforming its benchmark return of 14.4%.
Investment Strategy and Portfolio Highlights
The Fund maintains a concentrated portfolio primarily invested in high-quality Australian listed companies outside the S&P/ASX50, with selective exposure to international equities such as New Zealand. The investment approach focuses on identifying businesses with strong earnings growth potential and large, expanding markets, irrespective of economic cycles. Key contributors to performance included Life360, Technology One, and Genesis Minerals, each benefiting from robust operational growth and market tailwinds.
Distribution and Unit Price Dynamics
Reflecting the Fund’s strong earnings, distributions to unitholders increased significantly to 27.11 cents per unit, up from 7.50 cents the previous year. Despite this, the Fund’s ASX-listed unit price traded at a persistent discount to net asset value throughout the year, closing at a 12.5% discount as of 30 June 2025. The Responsible Entity has an active distribution reinvestment plan and a buy-back authority in place, though no units were repurchased during the year.
Governance and Risk Management
The Fund is managed by Ophir Asset Management Pty Limited under the oversight of The Trust Company (RE Services) Limited, a Perpetual Limited subsidiary. Governance practices align with ASX Corporate Governance Principles, with robust risk management frameworks addressing market, credit, and liquidity risks. The Fund’s auditor, Ernst & Young, issued an unqualified opinion, affirming the integrity of the financial statements.
Outlook
While the macroeconomic environment remains cautiously optimistic, the Fund’s management continues to emphasize a disciplined investment process focused on quality and valuation. The portfolio is positioned with a balanced mix of defensive and cyclical companies, aiming to navigate ongoing market uncertainties and capitalize on growth opportunities.
Bottom Line?
Ophir’s strong FY2025 results set a high bar, but persistent NAV discounts and macro uncertainties warrant close investor attention.
Questions in the middle?
- Will the Fund’s ASX unit price narrow its discount to NAV in the coming quarters?
- How will Ophir adjust portfolio allocations amid evolving economic signals?
- What impact will Perpetual Limited’s strategic moves have on the Fund’s governance and operations?