MFF’s Pre-Tax NTA Falls to $4.81, Dividends Set at 21 Cents

• NTA per share down to $4.81 pre-tax from $5.02
• FY26 fully franked dividends expected at 21 cents per share
• Portfolio focused on high-quality global tech and financial stocks
• Rising geopolitical tensions and inflationary pressures highlighted
• Maintains strong cash position and liquidity with 4% net cash

Net Tangible Assets Show Slight Decline

MFF Capital Investments (ASX:MFF) reported a small decrease in net tangible assets (NTA) per share for May 2026, with pre-tax NTA at $4.81 compared to $5.02 at the end of June 2025. Post-tax NTA also edged down slightly to $4.13 from $4.17. These figures are unaudited and approximate, reflecting the usual market fluctuations and tax adjustments.

Dividend Guidance Maintains Upward Trajectory

The company reaffirmed its intention to pay fully franked dividends totalling 21 cents per share for the 2026 financial year. This includes an interim dividend of 10 cents paid in May and a planned final dividend of 11 cents, subject to prevailing corporate and regulatory conditions. MFF’s franking credit balance remains robust at 45.2 cents per share, supporting the fully franked status of dividends.

Portfolio Manager Flags Rising Risks Amid Market Optimism

Portfolio Manager Chris Mackay highlighted a complex investment environment in May, marked by rising geopolitical tensions, inflationary pressures, and higher interest rates. Despite these headwinds, corporate earnings and outlooks remained resilient, particularly in the US where key indices rose around 5%, buoyed by technology sector gains and stimulus effects.

Mackay noted that while short-term optimism persists, longer-term risks are increasing, especially for fundamental investors wary of momentum-driven market strategies. The update pointed to the ongoing impact of wars, energy shortages, and populist policies, which continue to weigh on business and consumer sentiment globally.

Technology Advances Drive Market Value Uplift

The report detailed significant technological investments, estimating that advances may have added US$1 trillion in near-term revenues at high incremental margins. This surge in technology-driven profits is contributing to elevated market valuations, with investors financing these expenditures through yield-focused instruments offering 4-8% returns. MFF benefits indirectly from these trends, maintaining exposure to high-quality businesses while steering clear of the most heated tech shortages.

Portfolio Composition and Currency Exposure

MFF’s largest holdings continue to be major global technology and financial companies, including Alphabet, Amazon, MasterCard, Visa, Bank of America, Meta Platforms, Microsoft, and Home Depot. The portfolio holds approximately 4% net cash, with currency exposures diversified across AUD, USD, SGD, GBP, EUR, and HKD. Borrowings in GBP, EUR, and HKD remain modest relative to investment assets.

Macroeconomic Concerns and Opportunities in Government Technology Adoption

The update also discussed macroeconomic challenges such as government debt burdens, inflation risks, and rising interest rates, which continue to pressure asset valuations and economic growth prospects. However, it highlighted opportunities from government adoption of technology, including artificial intelligence, to streamline regulatory processes and improve efficiencies, potentially benefiting housing supply and reducing administrative costs.

Bottom Line?

MFF’s cautious portfolio positioning and steady dividend outlook reflect a balancing act between capitalising on technological growth and navigating escalating macro risks.

Questions in the middle?

• How will escalating geopolitical tensions impact MFF’s global holdings in the medium term?
• Can technology-driven revenue growth sustain current market valuations amid rising interest rates?
• What strategies will MFF employ if inflation and government debt concerns intensify?