News & Insights

Two rings of identical size, side by side. In each, one arc running clockwise from the top is filled in deep orange while the rest is a pale wash; in the second ring the filled arc is noticeably larger.
Education

Same equity risk, twice the franking

November 2026

A retirement portfolio is about half growth and half defensive. Inside the growth half, Australian shares pay a credit that comes back as cash to a pension-phase retiree, and foreign shares pay a tax that does not. Holding that slice through a hedged equity fund collects franking on 29% of the portfolio while putting 20% at risk.

Three paths leaving a single point. One runs level and off the right edge; the other two bend downwards and fade away before they reach it.
About Merlon

A capital allocation masterclass

November 2026

David Jones went into administration last Thursday. Twelve years ago its board had three options and took $4.00 a share in cash. What each of the three turned out to be worth, and what the chief financial officer who helped get it done did next at Metcash.

A filled silhouette of CSL's weight in the Merlon Concentrated Australian Share Fund over seven years: a low, barely visible edge across most of the width, then a steep rise to a peak near the right and a sharp fall away.
Stocks

CSL: how a long-term position gets sold

November 2026

We had never owned CSL. We bought our first shares in January 2026, built the position to nearly 6% of the fund by late August, and started selling two days after the result. The companion to Judo Bank, told from the other end: what a long-term horizon is a willingness to do, and what happens when the price does the re-judging.

An abstract illustration in Merlon's colours: two lines rising from left to right across a warm off-white field, tracking fifteen years of the Australian sharemarket's compounding growth. The upper line counts franking credits and the lower line does not, and the widening wedge between them is shaded. There are no axis labels, figures or words anywhere in the image.
Education

The 1.4% a year your performance table doesn't show

October 2026

Over fifteen years the Australian sharemarket returned 9.75% a year. It also returned 11.14%. The difference is franking — bigger than most fees, and missing from most performance tables. Where it comes from inside a portfolio, why a 70/30 blend collects only about seven-tenths of it, and why it belongs on both sides of any comparison.

A line drawing of a very large industrial building under construction, seen from above and to one side. A steel frame several bays deep stands open on the left, a long clad wall runs away to the right, and a crawler crane lifts a roof truss into place with a tower crane behind it. The yard around it is stacked with steel sections, panels and timber, and several hundred small figures are at work across the site. An illustration, not a photograph of any particular facility.
Markets

Postcard from Malaysia: at the front lines of the AI infrastructure build

October 2026

The largest Australian float in thirty years was pulled on 9 October. We had been in Malaysia days before, meeting the people who build and operate this capacity. What we found was a real cost advantage that belongs more to the place than to the company, and a wave of supply arriving over the next two years.

A line drawing of a heavy sandstone corner building: a rusticated arcaded base, a giant order of six engaged columns above it, small attic windows and a deep cornice, with a modern tower rising behind.
Markets

Why we no longer own a major bank

October 2026

In August 2025 we put a paper to our advisory board setting out what we thought of Australia's major banks. We owned two of them then and none of them now. Here is the argument, what a visiting investor said about why large funds cannot act on it, and where the numbers sit today.

Twenty large dark circles in four rows on the left, against a loose field of a hundred and eighty much smaller pale dots filling the rest of the frame.
Markets

Twenty companies, two-thirds of the index

October 2026

Twenty companies are 64% of the ASX 200 — and only three of them trade below their own five-year median multiple, against 99 of the 162 outside the top twenty. The gap survives every cut we tried.

Two waves. A pale line rises and falls evenly; a heavy dark line follows it almost exactly through the rises but cuts each fall to less than half, with the protected gap marked at each trough.
Education

Upside and downside capture: read them together

October 2026

A low downside capture number can be bought with cash, and it costs upside in the same motion. Why the spread between the two is the figure that matters, and how to check a fund.

Four dark envelopes along a timeline with three paler replies returning below it, and at the end one outlined envelope that never reaches the line.
Stocks

Aurizon: what we asked the board for, and what happened

October 2026

We wrote to Aurizon's directors three days after a $2.35bn acquisition, and kept writing for four years. The chairman answered, then disputed our account of him — and our own Advisory Board talked us out of the third letter.

An abstract line that falls sharply and settles, beside a position built in two steps with a pause between them
Stocks

Judo Bank: how a position gets built

September 2026

How a 40% one-day fall in a bank we had looked at for a year became a position in our portfolio: the research, the pause at half weight for our Advisory Board, and why liquidity rather than conviction set the final size.

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