The Australian Growth portfolio returned -3.4% in November, lagging the benchmark index which fell -2.8% in a soft month for the Australian share market. The Healthcare and (+2.0%) Consumer Staples (+1.5%) sectors led the market in the month. The majority of sectors finished in the red for the period with Information Technology (-11.7%) and Financials (-7.4%) underperforming the most.

Wisetech (+6%) was among our best performing companies this month. Its share price rose after the company reaffirmed earnings guidance at its Annual General Meeting (AGM). Wisetech also confirmed that key business initiatives are on track and, as part of this, released the revamped pricing schedule for its software products effective 1 December. The new pricing is expected to deliver a modest uplift in revenues across the client base. As part of its governance refresh, the company also announced the addition of Raelene Murphy to the Board and noted that she will join the audit & risk committee. We will be meeting the new Board members when we attend Wisetech's investor day in early December.

In contrast, Xero was our worst performing holding. In a perplexing market reaction, Xero (-16%) saw its share price fall sharply despite delivering what we considered reasonable financial results. Xero reported overall sales growth of +20% over the 1HFY26, in line with market expectations. Costs were contained as anticipated and cost outlook guidance was slightly better than expected. Free cash flow rose +54% in the period, and key growth metrics were largely met. The market appears to have focussed on the maiden result for Melio, a US-based payments business recently acquired by Xero. Strategically, the acquisition makes sense and pleasingly Xero has completed it earlier than expected with integration underway. Melio is still in its early development stage and as such is loss-making. This is therefore expected to weigh on Xero's profit growth for the next couple of years. By acquiring Melio, Xero is signalling its intent to focus on growing its presence in the US market. Historically, this has not been a happy hunting ground for Xero and the market remains sceptical about its prospects there. Xero's current management team, many of whom are based in the US, have a solid history of delivering growth in other software businesses. They have been methodical about laying the groundwork for success in the US. Integrating Melio into Xero's core software product suite, strengthens Xero's long-term prospects in our view.