Cadence Opportunities Fund Returns -2.3% in July with 7.4% Fully Franked Yield

July Performance Highlights and Market Drivers

Cadence Opportunities Fund (ASX:CDO) reported a challenging July with a gross return of -2.3%, falling behind the All Ordinaries Accumulation Index which rose 1.7%. The index’s gain was largely driven by the five major banks, despite their expensive valuations and a subdued earnings outlook. Over the trailing 12 months, however, the fund has posted a compelling 26.6% gain, comfortably outperforming the index’s 4.8% rise. Including dividends and franking credits, CDO’s share price surged 38.7% over the year, continuing its streak as one of Australia’s top-performing investment companies with a 22.1% annualised return since inception nearly eight years ago.

Stock Contributors and Detractors in July

Among July’s top performers were RingCentral, Turaco Gold, and Viva Energy. RingCentral, a software business specialising in enterprise communications, has rebounded strongly since its post-Covid slump. The return of its founder as CEO, cost restructuring, and new AI-driven product launches helped lift free cash flow by 40% year-on-year, pushing the share price up more than 50% following its 2Q26 results. Meanwhile, Viva Energy benefited from improved refining margins amid Middle East geopolitical tensions. With only two refineries left in Australia, Viva’s strategic assets reduce reliance on imports, enabling balance sheet deleveraging and enhancing near-term shareholder return prospects.

On the downside, Lindian, Guzman Y Gomez, Pro Medicus, and Samsung Electronics weighed on performance, reflecting broader market rotations and sector-specific pressures.

Dividend Policy and Yield Appeal

Cadence declared a fully franked final dividend of 7.5 cents per share on 15 July, bringing the full-year dividend to 15 cents fully franked. This represents a 6.5% yield on the announcement day’s share price of $2.31, or 9.3% grossed up for franking credits. Additionally, a fully franked special dividend of 2 cents per share was announced for the December quarter, lifting the fully franked yield to 7.4% and the gross yield to 10.5%. The fund maintains strong dividend coverage with over four years of profit reserves and 2.5 years of franking credits available to support distributions.

Portfolio Positioning and Liquidity

Reflecting shifts in market sentiment, Cadence has significantly reduced its exposure to gold and resource stocks, trimming over 80% of such holdings in the past six months. This move has increased the fund’s cash position, enabling it to selectively invest in high-quality companies that were previously too richly valued. The portfolio remains highly liquid, positioning CDO to capitalise on emerging opportunities amid ongoing market volatility.

Investor Engagement and Resources

Karl Siegling, Cadence’s managing director, recently delivered an investor roadshow presentation covering fund performance, dividend updates, and portfolio insights. The webcast also addressed current investment trends and the firm’s approach to navigating market conditions. Investors can access a curated list of investment books and documentaries recommended by Cadence to deepen understanding of their investment philosophy.