HM1 Delivers 25.5% Return, Boosts Fully Franked Dividend to 9.0cps
Hearts and Minds Investments (HM1) reported a stellar 25.5% pre-tax portfolio return for FY25, outperforming global benchmarks and announcing a raised fully franked dividend of 9.0 cents per share with plans for continued increases.
- FY25 investment portfolio returned 25.5%, beating MSCI World Index
- Final fully franked dividend increased to 9.0 cents per share
- Board plans 0.5 cent dividend increases every six months through FY26
- Net tangible assets per share rose to $3.44, share price up to $3.04
- Donated $9.5 million to Australian medical research in FY25
Strong FY25 Performance Outpaces Global Market
Hearts and Minds Investments Limited (ASX – HM1) has announced impressive financial results for the fiscal year ending June 30, 2025. The company’s concentrated global equities portfolio delivered a pre-tax return of 25.5%, significantly outperforming the MSCI World Accumulation Index (AUD), which returned 18.6% over the same period. Since its inception in late 2018, HM1 has generated a compound annual pre-tax return of 11.6%, underscoring the strength of its investment approach.
Dividend Growth Signals Confidence
Reflecting this robust performance, the Board declared a final fully franked dividend of 9.0 cents per share, payable in October 2025. This dividend represents a 5.9% yield based on the share price at June 30, 2025, and a grossed-up yield of 8.5%. Importantly, the Board has committed to increasing fully franked dividends by 0.5 cents every six months, targeting a total dividend payout of 19.5 cents for FY26. This progressive dividend policy is contingent on continued market performance, signaling confidence but also prudent caution.
Shareholder Value and Portfolio Highlights
Net tangible assets per share rose from $3.05 to $3.44 post-tax, while the share price climbed from $2.58 to $3.04, narrowing the discount to NTA from 15.3% to 11.8%. Combined with dividends, shareholders enjoyed a total return of 24% for FY25. The portfolio’s core holdings, including Zillow, NVIDIA, TSMC, Microsoft, Brookfield Corp, Block, and Rokt, were key contributors. The Conference Portfolio also added value, notably through Tencent Music and Coeur Mining.
Philanthropic Commitment Remains Central
HM1’s unique model continues to set it apart, donating 1.5% of net tangible assets annually to Australian medical research instead of charging traditional management fees. In FY25, the company donated $9.5 million to support pioneering research in areas such as cardiovascular disease, neurodegeneration, diabetes, genomics, immunotherapies, and paediatric medicine. This philanthropic impact is funded by the company’s fund managers and Board on a pro bono basis, reinforcing HM1’s dual commitment to shareholder returns and social good.
Looking Ahead
With a strong balance sheet, a clear dividend growth strategy, and a proven investment track record, HM1 is positioning itself for continued success. However, the Board’s caution regarding sustained market underperformance highlights the inherent risks in equity markets. Investors will be watching closely for the FY26 half-year dividend announcement to confirm the company’s dividend growth trajectory.
Bottom Line?
HM1’s blend of strong returns, rising dividends, and philanthropic impact sets a compelling stage, but market volatility remains a watchpoint.
Questions in the middle?
- Will HM1 sustain its dividend growth amid potential market headwinds?
- How will the portfolio adapt if core holdings face valuation pressures?
- What impact will ongoing medical research donations have on investor ESG sentiment?