Intelligent Investor Equity Growth Fund returned to a $4.769 million operating profit in the year to 30 June 2026, after recording a $242,000 loss a year earlier. The improvement came with sharply higher distributions, but substantial redemptions reduced net assets and the fund faces an unresolved change of investment-manager ownership.
- Operating profit of $4.769 million, versus a $242,000 loss
- Distributions increased to 22.39 cents per unit
- Net assets fell to $82.756 million after $15.652 million of redemptions
- Proposed sale of the Intelligent Investor business remains conditional
- International investment limit increased from 30% to 40%
Profit recovery driven by investment gains
The Intelligent Investor Equity Growth Fund (ASX:IIGF) returned to profit in 2026, with operating profit before finance costs attributable to unitholders reaching $4.769 million, compared with a $242,000 loss in the prior year. The turnaround was driven chiefly by a $4.002 million net gain on financial instruments at fair value through profit or loss, including $8.304 million of realised gains partly offset by a $4.302 million unrealised loss.
Total investment income rose to $5.952 million from $987,000, despite lower interest revenue and dividend and distribution income. Expenses were broadly stable at $1.183 million, including $898,000 in management fees. The reported earnings figure translated to 15.85 cents per unit, against a loss of 0.70 cents per unit in 2025.
Higher distributions, smaller asset base
The stronger result supported total distributions of 22.39 cents per unit, up from 5.64 cents. That included a June distribution of 20.62 cents per unit, leaving $6.044 million payable at year-end; $2.852 million was subsequently reinvested through the distribution reinvestment plan in July 2026.
Yet the fund ended the year smaller. Net assets attributable to unitholders fell from $93.818 million to $82.756 million, while units on issue declined from 32.229 million to 29.269 million. Applications totalled $5.733 million, but redemptions reached $15.652 million, producing a net outflow of roughly $9.9 million before distributions. Cash and cash equivalents also dropped to $7.933 million from $21.734 million.
Ownership transition remains unfinished
The report puts the fund’s investment-manager arrangements under a separate spotlight. InvestSMART Group Ltd announced the proposed sale of the Intelligent Investor business to Teaminvest Private Group Ltd (ASX:TIP) on 20 May 2026. The transaction remains conditional: one condition had been fulfilled after year-end, while the remaining conditions were still outstanding when the report was signed.
If the sale completes, Intelligent Investor Holdings is expected to remain the investment manager of the exchange-traded funds, with Teaminvest intending to retain the investment team and strategy. That is a stated intention rather than a completed change, leaving ownership and execution of the transition as the key unresolved issue.
Greater international capacity and currency protection
The fund’s product disclosure statement was updated on 2 September 2026 to permit up to 40% of the portfolio in international listed securities, compared with 30% previously. At 30 June, the fund had $81.150 million in listed equity securities and was using forward currency contracts to hedge part of its offshore exposure. The disclosed hedge ratio was approximately 69% of identified US-dollar exposure, with forward contracts carrying a $242,000 fair-value liability.
The portfolio remains exposed to ordinary equity-market volatility: the fund’s own sensitivity analysis estimated that a 15% move in equity prices would change operating profit and net assets by approximately $12.136 million in either direction. That sensitivity, combined with the lower unit count and pending ownership transaction, makes the next set of operating figures more revealing than the headline profit recovery alone.
Bottom Line?
The profit rebound is clear, but the fund’s next test is whether it can stabilise its asset base while completing the ownership transition and expanding its international mandate without adding disproportionate currency or market risk.
Questions in the middle?
- Will the proposed sale to Teaminvest Private Group complete, and will the investment team and strategy remain unchanged in practice?
- Can the fund reverse the substantial net redemptions that reduced units on issue and net assets during 2026?
- How much of the newly available international allocation will be used, and how will the hedge ratio evolve with that exposure?