ELMRI August 25 Report
Dear Investor,
During the month of August 2025, the ELMRI ANZ Conviction Fund declined by 4.2% and the ELM Responsible Investments Global Fund declined by 1.2%. Over a 12-month period ending August, the ELMRI ANZ Conviction Fund increased by 8.5% and the ELM Responsible Investments Global Fund increased by 26.2%.
Market Update:
Global equity markets continued their upward momentum in August, with the S&P 500 gaining 1.9% for a fourth consecutive monthly increase. The index set multiple new record highs, driven by robust corporate earnings where over 82% of companies beat estimates, the highest beat rate since 2021. Technology and communication services led gains, led by the Mag Seven tech giants, while investor sentiment was boosted by growing expectations of a Federal Reserve rate cut in September and enthusiasm for AI-driven growth.
In Australia, the ASX 200 rose 2.5% in August, extending its winning streak to five consecutive months. Early in the month, the index hit a record intraday high of 9,054.5, lifted by dovish commentary from US Federal Reserve Chair Jerome Powell that supported global risk appetite. The Reserve Bank of Australia reduced the official cash rate by 25 basis points to 3.60% on 12 August, its third cut of 2025, citing easing inflationary pressures and a softer growth outlook. The August monetary policy minutes signalled that further rate cuts are likely over the coming year, providing an additional tailwind for risk assets.
Market Outlook:
The current macroeconomic backdrop is increasingly favourable for our investment strategy. Inflation continues its downward trajectory across major economies, supporting the prospect of central bank rate cuts or easing monetary policy in the near term. Lower rates reduce the cost of capital, which in turn tends to support equity valuations and increase demand for growth-oriented assets.
While pockets of sluggish global growth and patchy consumer sentiment persist, these headwinds are partly offset by easing inflation and stronger corporate earnings, especially in innovation-driven sectors like technology and AI. We remain confident that companies leading in these transformative themes will continue to capture market share and deliver growth, thereby underpinning our positive view on risk assets for the remainder of 2025.
AI in Healthcare Outlook
Healthcare is in the midst of a technological renaissance, where advances in AI, digital health and diagnostic imaging are converging to redefine patient care and operational efficiency.
Demographics remain an unrelenting tailwind: ageing populations in the US, Europe, and parts of Asia continue to push healthcare spending higher.
One area which is being transformed is medical imaging, where AI is starting to reshape speed, accuracy, and clinical decision-making. Pro Medicus’ Visage 7 platform is one such example. The existing platform allows radiologists to handle everything from complex CT and and MR scans to everyday imaging in a single fast viewer.
Pro Medicus is integrating AI into Visage by partnering with Elucid, a leader in cardiac imaging AI. Elucid’s automated analysis of plaque and blood flow will be embedded directly within Visage, making AI-driven insights a natural part of everyday radiology practice.
Another parallel is within surgery, where AI is beginning to augment precision, consistency, and patient recovery. Intuitive Surgical’s da Vinci’s robotic-assisted system has been a key enabler of minimally invasive procedures in urology, gynecology, and general surgery, offering smaller incisions, fewer complications, and faster recovery than open surgery.
Now, Intuitive is embedding AI and computer vision to take this platform beyond mechanical assistance. By training algorithms on millions of hours of surgical video and instrument data, the system is learning to identify anatomical structures in real time, guide instrument placement, and provide data-driven feedback to surgeons. The goal is to reduce variability in outcomes across hospitals and geographies, helping even less experienced surgeons achieve expert-level precision. Over time, these enhancements promise not only better patient outcomes, but also shorter hospital stays and lower overall costs of care.
For investors, these technological advances signal significant growth opportunities as AI-driven innovations in imaging and surgery promise improved outcomes, greater efficiency, and cost reductions across a rapidly expanding healthcare market.
Company Spotlight: WiseTech
WiseTech's FY25 result delivered 17% organic CargoWise growth and exceptionally high recurring revenue (98%), with guidance for FY26 revenue of US$1.39–1.44 billion and EBITDA of US$550 - 585 million. While headline results were slightly below consensus primarily due to near-term integration costs from the e2open acquisition and a dip in margins, the strategic investment phase positions WiseTech for deeper global expansion and long-term value creation.
The appointment of Zubin Appoo, formerly Chief of Staff and Deputy Chief Innovation Officer, as CEO provides leadership continuity and reinforces WiseTech’s innovation credentials, but recent board changes mean governance oversight will remain a key watchpoint. Despite short-term share price pressure, WiseTech’s CargoWise platform remains under-penetrated among global logistics providers, and we believe the fundamental growth opportunity for the business beyond FY26 is highly attractive.
Read more about our views in the AFR here.
Company Spotlight: Sigma Healthcare
Sigma Healthcare delivered a strong FY25 performance following its merger with Chemist Warehouse Group. The company reported a 41% increase in underlying earnings to $835 million and a 40% rise in net profit to $579 million. Revenue jumped 82%, reflecting the combined group's larger scale and reach, with Chemist Warehouse achieving 14% growth in retail sales and opening 35 new stores. Management also lifted expected cost savings from $60 million to $100 million, supported by efficiencies from higher distribution volumes that reduced logistics costs by 11%. Sigma is focused on consolidating its physical store network in China while expanding online sales and streamlining distribution to sustain growth and profitability.
To learn more about why we believe Sigma is set for sustained growth, read our comments in this AFR article here.
Company Spotlight: Life360
Life360 reported an exceptional Q2 2025, with revenue rising 36% year-over-year to $115.4 million and net income turning positive at $7.0 million compared to a loss in the prior year. The company’s monthly active users grew 25% to approximately 88 million, while paying subscribers increased 25%, driving core subscription revenue up 38%. Life360 also expanded its international footprint, particularly in markets like Australia, Canada, and the UK, and improved gross margins to 78% as recurring revenue streams strengthened. We believe the company has plenty more room to grow via conversions, given it has 2.5 million paid subscribers worldwide but more than 88 million users.
You can read more about our views in this AFR article.
Company Spotlight: NVIDIA
Nvidia reported record revenue of $46.7 billion, up 56% year-over-year. This was largely driven by a 17% sequential increase in its Blackwell Data Center platform, central to AI infrastructure growth. While there were no H20 chip sales to China this quarter due to export restrictions, the company benefited from a $180 million release of reserved inventory outside China. CEO Jensen Huang highlighted strong demand for Nvidia’s AI technology across global markets and underscored substantial long-term opportunities as AI adoption accelerates. Despite short-term headwinds, Nvidia’s leadership in AI hardware and software positions it well for sustained growth in an expanding and transformative sector.
Conclusion
These companies are all actively investing in innovation and expanding into new markets, with a proven track record of success. We are excited about the future of our companies and remain invested for the long term.
Both the ELM Global Fund and the ANZ Conviction Fund are well-positioned to deliver long-term returns while capitalising on the transformative opportunities presented by AI and sustainability. By adhering to a disciplined investment strategy and focusing on companies driving innovation and positive change, ELM Responsible Investments continues to create value for investors while supporting a sustainable future.
If you wish to discuss any aspect of this report in greater detail, please do not hesitate to reach out. I would be more than happy to arrange a meeting at your convenience. Those interested in investing with us can explore our investment portal and review our fund documentation by clicking the "Invest Now" buttons provided below.
Thank you for your ongoing interest and support.
Kind regards,
Jai Mirchandani
Founder, CIO and Portfolio Manager
ELM Responsible Investments
ELM Responsible Investments Global Fund
ELMRI ANZ Conviction Fund
This note has been prepared by ELM Responsible Investments (‘ELMRI’) ABN 70 607 177 711 AFSL 520428, for Australian wholesale clients for the purposes of section 761G of the Corporations Act 2001 (Cth).
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This note is for general informational purposes only and does not purport to be comprehensive or to give advice. The views expressed are the views of the writer at the time of preparation and presenting and all forecasts, assumptions, opinions, data and other information are not warranted as to accuracy or completeness and are subject to change without notice. This is not an offer document and does not constitute an offer or invitation of investment recommendation to distribute or purchase securities, shares, units or other interests to enter into an investment agreement. No person should rely on the content and/or act on the basis of any material contained in this note. Any potential investor should consider their own circumstances and seek professional advice.
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Past performance is for illustrative purposes only and is not indicative of future performance.