The Australian Growth portfolio returned +4.2% in April, ahead of the benchmark index which rose +2.6%.

Vacillating investor perceptions on the prospects for peace in the Middle East were a key influence on equity markets during April. Investor optimism that the war may be closer to its end than its beginning saw the Energy sector give back some of its strong gains made in Q1 with the sector falling -3% in April. Healthcare (-9%) was also a laggard, dragged down by Cochlear’s earnings downgrade, and generally softer healthcare related data observed internationally. After a torrid run in recent months, the Information Technology sector (+13%) rebounded strongly and was the best performing sector, helped in part by a meaningful update from NextDC. The mining heavy Materials (+4%) sector also delivered another strong monthly performance.

NEXT DC (+28%) announced it had signed a record 250MW deal with a leading hyperscale customer which will become the anchor tenant of its S4 data centre facility in Sydney. This grows NEXT DC's total contracted MW to 667MW from 417MW in Dec'25 (+60% growth). To put the size of the latest deal into perspective, NEXT DC had signed a total of 245MW in the 15 years to Jun'25. Contracted MW signed in the last 12 months will convert to billed MW over the next 3 years and supports EBITDA growth from $217m in FY25 to $1bn+ by FY30/31. NEXT DC also announced a $1.5b equity raise, an additional $700m hybrid security, and $750m wholesale notes offer. This increases NEXT DC's cash and undrawn facilities to $6.6b for Jun'26 and will be used to fund the buildout of its data centres, including S4. We took up our full pro-rata entitlement in the equity offer.

During the month Cochlear (-44%) delivered a profit downgrade, lowering its FY26 underlying NPAT guidance range by 19-28%. The war in the Middle East has led to the cancellation of surgeries in the region and has also weighed on consumer sentiment in the US. The weaker US consumer sentiment, alongside a tougher reimbursement environment, including higher Medicare deductibles and increased administrative hurdles from private insurers, has led to cancelled or delayed surgeries. Conditions also deteriorated across other regions, with hospital capacity constraints and budgetary issues in Western Europe, as well as the withdrawal of government funding in China's special access zone. We view many of these issues as largely cyclical and do not believe they impact the long-term growth outlook, given the unmet need Cochlear is solving.