Chief Investment Officer, Jamie Nicol provides a brief update on the current market and how DNR Capital is responding.


Well, over the past year, we’ve been talking about inflation and the negative impact that that can potentially have on markets. What we’ve seen in recent months and particularly last month is central banks really committing to fighting inflation, lifting interest rates by 0.75% and highlighting a clear commitment to addressing inflation. Now, this presents challenges for the Fed because they’ve got to walk a fairly narrow path between trying to temper inflation without causing the economy to roll into recession. And I think markets over the past month have started to worry that they’re more likely to tip it into a recession. And as a result, markets have been quite weak.

So it can be quite difficult for investors to be able to anticipate the extent of a downturn, the extent of a recession, the extent of a economic slow down. But what we find is during these periods, if we can look through and try to find some good quality companies that are trading at decent discounts, then that can be quite opportunistic for us in the long run.

So a company that we’ve been adding to is Domino’s Pizza. It was halved over the last six months, it was a COVID winner, did very well through that period, but we have seen its earnings pull back as expectations get a little bit more manageable. But when we think about Domino’s, we think it’s quite a resilient business. It’s product is priced at a low price point. So if the consumer is feeling a bit stretched from inflation, then that potential for them to trade down to a product like Domino’s is quite strong. And so I think it’ll prove to be quite resilient. It’s got opportunities to grow through Japan, through Europe, potentially add some new regions and with very good management focused on ensuring that they can respond to the current environment. We think they’ll be better placed than the most companies. So opportunities to add quality, give businesses, amidst the downturn, can be a profitable exercise in the long run.


This article has been prepared  and issued by DNR Capital Pty Ltd, AFS Representative – 294844 of DNR AFSL Pty Ltd ABN 39 118 946 400, AFSL 301658. Whilst DNR Capital has used its best endeavours to ensure the information within this document is accurate it cannot be relied upon in any way and you must make your own enquiries concerning the accuracy of the information within. The information in this document has been prepared for general purposes and does not take into account the investment objectives, financial situation or needs of any particular person nor does the information constitute investment advice. Before making any financial investment decisions you should obtain legal and taxation advice appropriate to your particular needs. Investment in DNR Capital Funds can only be made on completion of all the required documentation. The Trust Company (RE Services) Limited ABN 45 003 278 831 AFSL No 235150 (as part of the Perpetual Limited group of companies) is the issuer of the PDS for the Funds. An investor should obtain and read the PDS and target market determination and consider their circumstances before making any investment decision. The PDS and target market determination are available at the Fund website at, or a paper copy can be obtained, free of charge, upon request by calling DNR Capital Pty Ltd (‘Manager’), the investment manager of the Fund on 07 3229 5531. Total returns shown for the Fund have been calculated using exit prices after taking into account all of Perpetual’s ongoing fees and assuming reinvestment of distributions. No allowance has been made for taxation. Past performance is not indicative of future performance. The Manager or The Trust Company (RE Services) Limited does not guarantee the repayment of capital from the Fund or the investment performance of the Fund. An investment in this Fund is subject to investment risk including loss of some or all of an investor’s principal investment and lower than expected returns.