Third Link Growth Fund managers have described 2025 as a year defined by extreme market volatility and sharp style dispersion, with returns concentrated in a few large-cap and defensive sectors. According to Chris Cuffe, Founder and CIO, volatility was a clear theme across the fund’s managers. The Third Link Growth Fund is a unique investment vehicle that donates its profits to Australian charities. It offers investors the opportunity to generate financial returns while supporting philanthropic causes.
Fund managers highlighted that the Big Four banks and defensive sectors accounted for approximately three-quarters of ASX 300 performance up to October 31. Cuffe noted that the fund has outperformed its benchmark for five consecutive months, delivering 5.25 per cent alpha for the FY26 period ending November 30. Looking ahead, the fund’s managers anticipate a shift back to fundamentals in 2026, emphasising valuation discipline, earnings quality, and selective stock picking.
Victor Gomes of Eiger Capital observed that small and mid-caps outperformed top-50 stocks significantly in 2025, but cautioned that valuations now seem stretched. Rob Tucker of Chester Asset Management and Matt Booker of Spheria Asset Management highlighted the impact of narrative-driven swings in sectors like AI, tech, and gold, stressing the importance of disciplined investment strategies.
Jared Pohl of ECP and Tim Carleton of Auscap believe that heightened volatility is creating opportunities for patient investors who are focused on underlying fundamentals. The consensus among Third Link Growth Fund managers is that 2026 will favour a fundamentals-based approach, moving away from the trends that dominated the market in 2025.
