Company Interview / How Argo is targeting record returns in a choppy market

Key points:

Argo shifts to quarterly fully franked dividends and targets 40c per share in 2027 Portfolio performance driven by $MQG, $BHP and $RIO, with an underweight to $CBA Selective AI and unlisted investments, including exposure associated with $NVDA Beddow flags valuation, geopolitical and interest rate risks as key volatility drivers

Argo Investments targets growth in fully franked dividends amid volatility ,Jason Beddow from Argo Investments outlines a strategy focused on growing fully franked dividends while maintaining a conservative, diversified portfolio. Argo reports a record fully franked dividend of 38.5 cents per share for FY26 and signals plans to pay 40 cents per share in 2027, with a shift to quarterly dividends from January. Beddow indicates this move is designed to provide more regular income, particularly for retirees, and to better align dividend outflows with Argo’s own cash inflows.

Beddow highlights that Argo’s one, three and five‑year performance is ahead of the market in his view, despite a challenging period for active managers. Key contributors are cited as Macquarie Group ($MQG), BHP ($BHP) and Rio Tinto ($RIO), while the portfolio remains underweight Commonwealth Bank of Australia ($CBA) due to valuation concerns. Argo has also added small AI‑related and unlisted exposures, including an investment linked to Nvidia ($NVDA), while keeping overall risk limited.

Looking ahead, Beddow expects heightened volatility through reporting season, driven by elevated valuations, geopolitical risks in the Middle East and uncertainty around interest rate paths in Australia and the United States. He also points to ongoing buybacks as Argo trades below net tangible assets.