Walter Scott Global Equity Fund’s operating profit fell to A$4.1 million in 2026 from A$349.5 million, while net assets dropped by about A$1.1 billion. The audited report points to weaker investment gains and substantial redemptions, although the fund remained fully invested in quoted equities and received an unmodified audit opinion.
- Operating profit fell to A$4.1 million from A$349.5 million
- Net assets attributable to unitholders declined to A$2.36 billion
- Redemptions reached A$1.32 billion, against A$392.6 million of applications
- Distributions paid or payable fell to A$285.5 million
- A 10% portfolio move would change net assets by about A$257.8 million
Investment gains collapse as fund assets contract
The Walter Scott Global Equity Fund reported a dramatic reversal in its financial result for the year ended 30 June 2026, with operating profit falling to A$4.1 million from A$349.5 million a year earlier. Net assets attributable to unitholders fell from A$3.46 billion to A$2.36 billion, a reduction of roughly A$1.10 billion.
The fund’s equity portfolio was valued at A$2.58 billion at year-end, down from A$3.97 billion. Net gains on financial instruments dropped to A$17.5 million from A$360.2 million, while dividend income declined to A$32.8 million from A$52.5 million. The report does not separate the effect of market movements from the effect of investor withdrawals, so the accounts alone do not establish how much of the asset decline came from investment performance versus redemptions.
Redemptions outweighed new applications
Investor flows were firmly negative. Applications across the two unit classes totalled A$392.6 million, while redemptions reached A$1.32 billion. The unquoted class accounted for almost all of that movement, with A$1.32 billion of redemptions and A$386.7 million of applications; its closing net assets fell to A$2.33 billion from A$3.43 billion.
The exchange traded class was much smaller, ending the year with A$25.0 million of net assets, compared with A$24.3 million a year earlier. Across the fund, A$112.1 million of distributions was reinvested rather than paid in cash, but total distributions paid or payable still fell to A$285.5 million from A$663.8 million. The unquoted class distribution declined to 35.96 cents per unit from 65.52 cents, while the ETF class fell to 102.51 cents from 193.70 cents.
Fees remain material against weaker returns
Management fees fell with the fund’s asset base, but remained substantial at A$38.6 million, compared with A$55.4 million in 2025. Both classes were charged a fee rate of 1.28% of net asset value, inclusive of GST and net of available reduced input tax credits.
The cash-flow statement shows the fund processing A$1.40 billion of net operating cash inflows, alongside A$1.37 billion of redemption payments and A$418.2 million of distributions paid. Cash at year-end increased to A$49.7 million from A$38.6 million. Related funds managed by Macquarie or its affiliates held units in the trust, including a 34.54% interest held by Walter Scott Global Equity Fund (Hedged) at 30 June 2026, and were owed A$81.7 million in redemption proceeds.
Portfolio remains exposed to equity market swings
All of the fund’s A$2.58 billion investment portfolio was classified as level 1, meaning the securities had quoted prices in active markets. That makes the valuation comparatively observable, but not the portfolio immune to volatility: the report estimates that a 10% market-price movement would change profit or net assets by approximately A$257.8 million in either direction.
The trust says it remains unhedged for foreign exchange exposure and does not use derivatives to gear the portfolio. Its liabilities, excluding net assets attributable to unitholders, totalled A$277.6 million at year-end, including A$173.7 million of distributions payable and A$100.7 million of redemptions payable. Ernst & Young issued an unmodified audit opinion and identified investment existence and valuation as the report’s key audit matter.
The filing records no significant post-year-end event or contingent liability. M Aubrey joined the responsible entity’s board on 9 July 2026, after the reporting date, while the fund’s stated strategy remains unchanged. The more immediate question is whether the heavy redemption pattern has ended, and whether a smaller asset base can support the same fee structure and distribution profile if market conditions remain unsettled.
Bottom Line?
The next meaningful signal will be whether redemptions stabilise and investment gains recover without further pressure on the fund’s reduced asset base.
Questions in the middle?
- Were the A$1.32 billion of redemptions concentrated in a particular period or investor group?
- How did the fund perform against its benchmark and global equity peers after accounting for distributions?
- Can distributions return to prior levels without relying on stronger market gains or renewed applications?