In August the Australian Growth Fund returned +6.7% compared to the benchmark index which returned +1.9%.  August heralded the biannual financial reporting 'season' for ASX listed companies. In aggregate our portfolio companies delivered good financial results, which in turn was corroborated by the share prices of the companies going up in the month. 

Atlassian (+88% in A$) was the standout. Atlassian delivered another strong quarterly result that was ahead of guidance and of market's expectations. Total revenue grew +28% in the June quarter, underpinned by Cloud revenue growth of +31%. Cloud revenues were supported by seat expansion (more paid users). Customers also used more of Atlassian's products (i.e. cross-sell was successful), while Atlassian’s price increases also helped revenue growth. Seat expansion in its core products contradicted the fear that Artificial Intelligence (AI) would end up reducing the number of customers using Atlassian's software. Pleasingly, Atlassian saw uptake of product 'Collection Bundles', which makes AI processes more efficient and less costly because the AI agent can operate and find solutions within the context of Atlassian's software without burning up a lot of computing capacity processing data outside of Atlassian's ecosystem. This reduces the cost of AI for Atlassian's customers. 

Our bank positions, Westpac (-9%), CBA (-8%), NAB (-7%) and ANZ (flat) were collectively the lowlight for the month. The banks delivered a mixed reporting season in August which led to analysts modestly reducing their future earnings growth expectations for the banks.  The major banks in aggregate delivered 3% revenue growth (ex-markets) in the June quarter, decelerating further from the 4% and 6% growth delivered in the March and December quarters respectively.  A softening housing market and consequent negative impact on demand for mortgage lending was key to this slowdown.