North American
Portfolio

The North American Portfolio returned +0.3% (AUD) in May 2026 — broadly flat, and unchanged in USD terms — trailing a sharply higher S&P 500 (+5.4% AUD) by roughly 510 basis points for the month. The shortfall is best understood as a single-month, factor-driven event rather than a thesis problem: US equities pushed to fresh record highs on a narrow, mega-cap, AI-led advance, while the portfolio’s grid, nuclear, electrification and materials complex consolidated after an exceptionally strong multi-month run. Over every horizon beyond one month the strategy remains decisively ahead — +37.1% over twelve months versus +14.8% for the benchmark.

The proximate driver was a hawkish repricing of the US rate path. Energy-driven inflation — Brent crude held above US$100 on Strait-of-Hormuz risk, and US producer prices jumped — lifted long-end Treasury yields and led markets to price out 2026 rate cuts and raise the odds of a hike. That is a direct headwind for the capital-intensive, rate-sensitive utilities and independent power producers that anchor the book. Utilities were the largest detractor: GE Vernova (−12.8%), NextEra (−10.9%) and Constellation (−7.7%) all gave back ground after leading for much of the past year, with the merchant-power names also reflecting concerns over new supply and potential intervention. Albemarle (−10.1%) fell alongside the materials complex as the US dollar firmed.

Two positions cushioned the month. Generac (+7.4%) extended its advance on grid-reliability and backup-power demand tied to data-centre and distributed-generation growth, where management continues to guide data centre toward a double-digit revenue contributor. Wheaton Precious Metals (+5.3%) benefited from the precious-metals bid, as gold retained a structural geopolitical-risk premium through the Iran conflict. The book’s defensive options overlay was a drag in a rising tape — the cost of carrying downside protection into a record-high market — but is consistent with its deliberately net-short-beta, long-gamma posture into an event-heavy June (Fed meeting, quarterly expiries, geopolitics).

Currency was broadly neutral this month, a marked change from April’s 4%+ AUD appreciation, which had been a material translation headwind; the modest AUD softening in May contributed a small translation tailwind. We did not chase the mega-cap AI leadership and continue to favour the physical build-out of power — generation, grid, nuclear fuel and thermal management — where multi-year demand visibility remains the clearest. A resolution of the Middle East conflict, by easing oil prices, inflation expectations and Treasury yields, would be directly supportive of the portfolio’s rate-sensitive core.

Performance Summary — AUD Returns to 31 May 2026

Returns are net of fees for the North American SMA strategy composite. Benchmark is the S&P 500. Two- and multi-year figures are annualised where indicated. Past performance is not a reliable indicator of future performance.

Top 5 positions by portfolio weight. Click any row to expand the investment thesis and Atlas conviction level. Data as at 31 May 2026.

Return shown is the individual security’s total return for the month; contribution is its contribution to the equity sleeve. Portfolio-level return reflects all positions, offsets and the options overlay.

ECATS monitors four independent signals that inform portfolio positioning.

Interactive breakdown of the North American Portfolio by sector and market capitalisation as at May 2026.