SGH Opportunities Fund update – September Quarter 2025

SGH Opportunities Fund update: Benchmark-beating performance driven by minerals, gold and tech.

The SGH Opportunities Fund continued to deliver strong performance returning 19.6% after fees and outperforming its benchmark by 4.4%. In this quarterly update, Assistant Portfolio Manager Sophie Smith recaps the key drivers, including some strong results from gold stocks and the tech sector.  She also shares insights into portfolio positioning, microcap momentum, and what the current cycle means for investors.

Watch/Listen to the September Quarter 2025 SGH Opportunities Fund update ⏬:

 

Transcript:

 SGH Opportunities Fund performance for the quarter

Welcome back to the SGH Opportunities Fund quarterly update. I’m Sophie and it’s great to be back with you. Rory won’t be able to join me today as he’s currently in Cambodia on a site visit with a portfolio holding Emerald Resources. So, we’ve just closed out another strong quarter for the fund, delivering a 19.6% net return, outperforming the S&P ASX small ordinaries accumulation index by 4.4%.

Key drivers of performance

The strong returns have been driven by strength across critical minerals, gold, and select tech enablers. September itself was particularly strong. The portfolio returned 12.5% versus the benchmark’s 3.4% return, marking an outperformance of more than 9% for the month. The Australian market rose solidly over the quarter with Small Caps again outperforming. The Small Ordinaries index gained 15.3% for the quarter, supported by improving liquidity, growing confidence around prospective rate cuts, and a rotation into cyclicals.

Gold a standout!

So, the standout theme though was gold. The All-Ordinaries gold index surged 40% for the quarter, up 25% in September alone as investors sought safe haven exposure amid falling real yields, a weaker US dollar, and rise in geopolitical tensions. This provided a powerful tailwind for many of our portfolio holdings.

So across the broader market, sentiment continued to improve as well. Domestic confidence lifted inflation expectations remained contained, and the RBA held rates steady following their cut in August. While valuations across global markets are elevated, the ongoing rotation towards smaller companies and renewed strength in commodities continues to create a constructive backdrop for active managers.

Portfolio performance in September quarter was underpinned by three major themes. So the first one was the continued gold market strength. The sharp rally in gold prices supported a material re-rating across producers and explorers, and we benefited from multiple holdings exposed to this trend.

Strong capital raisings across the sector also highlighted growing confidence among management teams to fund exploration and development. The second major theme was Strategic Metals momentum. The announcement of a US $400 million partnership between MP materials and the US Department of Defense was a major catalyst for critical minerals more broadly, particularly those linked to Western supply chain sovereignty such as tungsten and timney and gallium.

We saw substantial read ratings across these niche metals during September. The third theme of the quarter was selective exposure to technology innovation. Our focus on small cap tech companies delivering proprietary reoccurring revenue solutions continues to add value. We’re seeing genuine earnings leverage from businesses commercializing differentiated platforms with global scalability.

Technology a strong contributor

So now let’s touch on some of the standouts for the quarter and key contributors to performance. DUG Technology was a standout this quarter, returning nearly 70% in September after announcing a landmark multi-year US $43 million contract with Petronas Digital. DUG provides high performance computing and cloud-based software to process complex geoscience data, essentially helping global energy and resources companies image and model the subsurface more accurately.

This agreement is one of DUG’s largest commercial wins to date and materially enhances forward revenue visibility. It also validates DUG’s proprietary elastic, multi-parameter, full waveform emergent imaging technology, far more simply known as EMPFWI, which delivers faster and sharper imaging results than traditional seismic methods.The deal underscores DUG’s transition from a services business to a recurring software as a service model with strong global scalability.

Benz Mining was a strong performer on the back of four high grade gold lens discoveries at Zone 1 2 6 within the Glenburgh Gold Project. This result, 17 meters at six grams per ton from 662 meters, further validates of their predictive exploration model and supports the view that Glenburgh has the scale to underpin a hundred thousand ounce per year production profile.

Almonty Industries also continues to gain momentum as the market recognizes strategic value of its Sandong Tungsten project in South Korea. With Western governments prioritizing defense linked supply chains, tungsten has reemerged as a critical material, and Almonty remains one of the few near term producers aligned to those long-term structural themes.

And finally, Felix Gold, also Rerated sharply through September as investors recognized its antimony exposure, a key strategic metal increasingly viewed as an essential to defense and energy applications. The company is now positioned as one of the some most leveraged beneficiaries of Western policy support for critical mineral development.

Current fund positioning

While markers have had a strong run, we’d remain constructive on the medium-term outlook. Liquidity conditions are improving, micro-cap activities picking up, and small cap valuations remain attractive relative to large cap. Our focus remains on companies aligned with enduring structural themes, supply chain sovereignty, decarbonization, and tech innovation.

These are areas where we continue to see strong fundamentals in the potential for sustainable alpha generation. We’ll continue to manage risk prudently, but we see this as a period of opportunity, particularly for investors looking further down the market cap spectrum where quality growth stories remain mispriced.

It’s been another strong quarter for the SGH Opportunities Fund with broad based performance and multi portfolio catalyst playing out. Thanks for tuning in, and I look forward to updating you again next quarter.

*The text has been edited for clarity.

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Disclaimer

This fund update has been prepared by SG Hiscock & Company (SGH) to provide general information only and is not intended to take the place of professional advice. It does not take into account the investment objectives, financial situation or particular needs of any particular person.

Equity Trustees is the responsible entity for the SGH Opportunities Fund. Neither SGH, Equity Trustees nor any of its related parties provide any warranty of accuracy. Past performance should not be taken as an indicator of future performance. You should obtain a copy of the Product Disclosure Statement before making a decision about whether to invest in this product. Follow the link for the full disclaimer: https://sghiscock.com.au/podcast-disclosures-and-disclaimers/.