Airlie Funds Management is maintaining its underweight position in Commonwealth Bank (CBA), even after it negatively impacted the performance of its flagship $981 million fund for the second consecutive year. The Australian share fund returned 10.3 per cent for the 2025 financial year, underperforming the S&P/ASX 200 benchmark by 3.5 per cent. This underperformance was largely due to its smaller holding in CBA compared to the broader index. Airlie Funds Management is a boutique investment management firm focused on delivering superior long-term investment returns for its clients through careful stock selection. The firm manages investments across a range of asset classes, including Australian equities.
In a letter to investors, Airlie acknowledged its view on CBA was incorrect, despite the shares rising from approximately $130 in July last year to a peak of $192 in late June. According to Joe Wright, Airlie’s deputy portfolio manager, the underweight position in the big four banks cost the fund 4 per cent of relative performance in the last financial year. Airlie believes CBA’s multiples are trading far above what they consider an attractive valuation, prompting them to maintain their underweight stance.
Besides CBA, Airlie’s performance was also affected by the governance crisis at Mineral Resources (MinRes) and its investment in James Hardie. However, Sigma Healthcare, the home of pharmacy giant Chemist Warehouse, was the fund’s best-performing stock, rocketing 135 per cent in the last 12 months. Airlie is also optimistic about Rupert Murdoch’s News Corp and increased its holdings during the market downturn in April. They also invested further in SGH, Charter Hall, and Aristocrat Leisure, while adding Goodman Group and JB Hi-Fi to the portfolio.
Airlie also holds Bluescope Steel and small-cap real estate platform Aspen in its top 10 positions. The fund outperformed the ASX 200 by 1 per cent per annum since its inception in June 2018. The team sold out of IDP Education at $10, with the stock last trading at $3.79. Wright believes Bluescope remains undervalued, with the market underestimating the structural earnings growth potential of the business over the next five years.
