Fund Manager Summary on ASX Ltd (ASX:ASX)
In February 2026, Pendal Group commented that ASX Ltd (ASX:ASX) announced a further step up in FY26 costs while delivering a positive 1H26 trading update, with management expecting NPAT to beat consensus by about 5% on strong revenues even as ASIC-related costs could persist into FY27. Overall, fund managers see ASX:ASX as a core market operator with structural tailwinds from higher trading volumes and fee opportunities—Pendal noted daily equity turnover and derivative volumes were up 25% and 22% year-on-year and Akambo reported record revenues and elevated dividend yield—but they are increasingly cautious because of execution and regulatory risk, notably repeated delays and cost overruns on the CHESS replacement, rising and potentially embedded regulatory-driven opex and D&A guidance changes, and the possibility that ASIC’s review could force a broader strategic response; Ten Cap described the stock as an expensive defensive with limited earnings growth and valuation at the top of its three-year PE range, Pendal’s October and February notes quantified higher cost-growth ranges and flagged out-year uncertainty, and AllianceBernstein exited positions as regulatory risk rose. Actionable considerations are to monitor ASIC’s final report and ASX’s June investor day for clarity on FY27 cost exposure and strategy, assess whether one-off regulatory spend becomes recurring or prompts a strategic pivot, and balance near-term upside from stronger trading activity and fee expansions against valuation and ongoing execution risk around CHESS and cost management.
Commentary From The Managers
There are 8 insights from 6 fund managers regarding their investment in ASX Ltd (ASX:ASX) available on Thesis Tracker.
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Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Pendal Group
2 Feb 2026
$57.03
Summary
- Pendal Group believes ASX's regulatory-related cost shock is largely priced in and continues to hold because 1H26 trading beat and multiple fee-growth opportunities underpin earnings resilience.
- Pendal Group notes ASX has signalled a further step-up in FY26 costs: prior guidance of 4–7% opex growth, plus +4% D&A, +8% one‑off ASIC costs, and an additional +4% tied to ASX’s initial response to ASIC — totalling roughly 20–23% cost growth.
- Pendal Group observes there remains potential for further costs in FY27; ASX expects to clarify this at the June investor day after reflecting on ASIC’s final report (March).
- Pendal Group acknowledges these costs are a headwind but were anticipated by the market; the share price already fell about 10% following the interim report.
- Pendal Group highlights the new, positive information: despite higher 1H26 costs, ASX now expects NPAT to beat consensus by ~5% driven by stronger revenues.
- Pendal Group emphasises ASX has a number of fee opportunities over coming years, representing ongoing upside risk to consensus; consensus has so far only lifted 1H26 revenues and is awaiting more detail before revising later years.
- Pendal Group views the discounted share price response to the shift in earnings risk as creating an attractive risk–reward opportunity from its perspective.
Pendal Group
12 Jan 2026
$52.80
Summary
- Pendal Group updates their investment thesis on ASX Ltd to reflect recent market and volume developments
- Market reaction: ASX was +1.9% following strong monthly trading activity in December
- Trading volumes: daily equity turnover was up 25% year on year and derivative volumes were up 22% year on year
- Derivatives milestone: first time derivative activity exceeded pre‑COVID levels during a quarter end
- Quarter‑end dynamics: quarter ends typically see about double activity but had been constrained by rule changes that reduced trading incentives during roll periods
- Regulatory adjustments: further rule changes implemented in the June 2025 quarter were designed to bring traders back at quarter end
- Evidence of recovery: these changes now appear to be bearing fruit, supporting a recovery in quarter‑end derivative activity and overall volumes
- Investment implication: Pendal Group views these trends as supportive of improved trading‑related revenue and has updated their thesis accordingly — this is not financial advice
Akambo
24 Nov 2025
$58.08
Summary
- Akambo updates their investment thesis on ASX Ltd, noting challenges with the CHESS replacement system.
- The project has faced constant delays and cost overruns.
- Barrow initially purchased ASX Ltd stock in June 2024 at around $60, currently trading at $57.48.
- Barrow acknowledges they underestimated regulator frustration regarding the CHESS project delays.
- Concerns about increased competition are considered overblown, especially after Cboe exited the Australian market.
- ASX Ltd is experiencing record high revenue, with earnings per share near historical levels.
- The dividend yield is at a 10-year peak, supporting Barrow's investment.
- Akambo continues to hold ASX, indicating that it may require some patience.
Pendal Group
27 Oct 2025
$57.28
Summary
Alliance Bernstein
30 Sept 2025
$58.59
Summary
- Alliance Bernstein sold their investment in market exchange ASX.
- Increased regulatory risks were a primary concern.
- The decision reflects a cautious approach to potential market volatility.
- Focus on maintaining a balanced portfolio amidst uncertainties.
Ten Cap
30 Apr 2025
$70.73
Summary
- Ten Cap continues to hold ASX Ltd due to its defensive characteristics.
- ASX rallied through April, benefiting from a market "risk-on" sentiment.
- Despite the rally, Ten Cap views ASX as an expensive defensive investment.
- There is limited earnings growth potential for ASX Ltd.
- The current valuation is at the top of its 3-year PE range.
- Ten Cap does not believe that the performance seen in April is sustainable.
Airlie Funds Management
31 Dec 2023
$63.52
Summary
- Airlie Funds Management sold their investment in ASX (+10%) after establishing the position only in August.
- Upon reevaluation, Airlie Funds Management determined that cost and capex growth were likely to persist longer than initially anticipated.
- The fund also exited their position in Region Group.
- Proceeds from these exits were recycled into increasing their position in Waypoint REIT.
- Airlie Funds Management believes Waypoint REIT offers better debt tenor and enhanced inflation protection in its rental agreements.
Montgomery Investment Management
31 Aug 2023
$57.59
Summary
- Montgomery Investment Management has updated its investment thesis on ASX Ltd (ASX:ASX).
- The ASX faced significant challenges, primarily focused on the CHESS replacement project and rising costs.
- The CHESS system, intended to be replaced by a blockchain solution, encountered delays and cost overruns.
- Following the appointment of a new CEO in August 2022, an independent review was conducted, leading to the cancellation of the project in its current form.
- While the team initially benefited from rising interest rates on collateral cash balances, expectations of net interest income overcoming rising costs were incorrect.
- Inflation has caused costs to escalate to double digits, outpacing the benefits from interest rates.
- Consequently, Montgomery Investment Management has reduced its position in ASX Ltd pending further information regarding the resolution of these issues.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who is investing in ASX Ltd (ASX:ASX)?
Fund managers including Airlie Funds Management, Ten Cap, Montgomery Investment Management, Pendal Group, Akambo and Alliance Bernstein have invested in ASX Ltd (ASX:ASX).
Why do fund managers invest in ASX Ltd?
Fund managers invest in ASX Ltd primarily due to its significant market position and revenue stability. Despite concerns about regulatory delays and rising operational costs, ASX has a strong dividend yield and earnings that are generally robust. However, some analysts view the stock as expensive, with limited growth prospects and elevated valuation. Regulatory scrutiny and competition also pose risks, making investors cautious. Overall, ASX is seen as a defensive play within a fluctuating market.
What happened to ASX Ltd (ASX:ASX)?
Fund managers maintain investments in ASX Ltd due to its strong revenue performance and historical earnings per share, despite ongoing challenges related to regulatory scrutiny and the delayed CHESS replacement project. While concerns about embedded regulatory costs exist, some managers believe that competition fears are overstated, particularly following the exit of a significant rival. However, others have opted to exit due to rising regulatory risks, highlighting a mixed outlook within the investment community.
What is the short interest in ASX Ltd (ASX:ASX)?
The short interest in ASX Ltd (ASX:ASX) is 1.89% which makes it the 138th most shorted stock on the ASX. Of the 194.3M shares that ASX Ltd has on issue, 3.7M have been sold short.
What does ASX Ltd (ASX:ASX) do?
ASX Ltd. engages in operating a securities exchange. Its products and services include listing and issuer services, trading venue; clearing and settlement activities, exchange-traded and over-the-counter products, and information and technical services. The company was founded in April 1987 and is headquartered in Sydney, Australia.