Fund Manager Summary
The fund managers believe that the outlook for Commonwealth Bank of Australia (CBA) presents limited opportunities at its current valuation of approximately $99.85. They consider CBA to be a fantastic franchise with an exceptional management team, positioning it as one of the world’s great banks. However, in their opinion, these strengths are already reflected in its premium valuation, leading them to maintain an underweight position in the Bank sector. They express a willingness to revisit the investment should there be a pullback in valuation, indicating a cautious but optimistic stance on future opportunities.
Source: Trading View
Commentary From The Managers
Subscribe To Unlock
Date
Price
Summary
Unlock Recent Updates With ThesisTracker Pro
Don’t let information asymmetry undermine your investment returns. Join other engaged investors on ThesisTracker Pro.
Equity Trustees Asset Management
30 Sept 2025
$166.90
Summary
- Equity Trustees Asset Management continues to hold an underweight position in CBA due to its unjustifiably high valuation.
- Previous analysis indicated that CBA's outperformance was largely due to a re-rating of the Price-earnings (PE) multiple rather than genuine earnings growth.
- Many factors contributing to PE expansion were deemed non-fundamental.
- The high starting valuation compared to historical averages and peers necessitated meaningful earnings upgrades to justify current levels.
- While there was a slight upgrade in earnings per share, it was primarily due to lower bad debts, which are considered a lower quality item.
- Disappointing net interest margins led to flat pre-provision profit estimates following results.
- The combination of limited upgrades, strong results from peers, and a better commodity price outlook resulted in capital being redirected away from CBA.
Text:
Text:
Text:
Summary
-
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua, ut enim ad minim veniam.
-
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat, sed ut perspiciatis unde omnis iste.
-
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur, at vero eos et accusamus et iusto odio dignissimos.pedita.
Text:
Text:
Text:
Summary
-
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua, ut enim ad minim veniam.
-
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat, sed ut perspiciatis unde omnis iste.
-
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur, at vero eos et accusamus et iusto odio dignissimos.pedita.
Text:
Text:
Text:
Summary
-
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua, ut enim ad minim veniam.
-
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat, sed ut perspiciatis unde omnis iste.
-
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur, at vero eos et accusamus et iusto odio dignissimos.pedita.
Text:
Text:
Text:
Summary
-
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua, ut enim ad minim veniam.
-
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat, sed ut perspiciatis unde omnis iste.
-
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur, at vero eos et accusamus et iusto odio dignissimos.pedita.
Text:
Text:
Text:
Summary
-
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua, ut enim ad minim veniam.
-
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat, sed ut perspiciatis unde omnis iste.
-
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur, at vero eos et accusamus et iusto odio dignissimos.pedita.
Text:
Text:
Text:
Summary
-
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua, ut enim ad minim veniam.
-
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat, sed ut perspiciatis unde omnis iste.
-
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur, at vero eos et accusamus et iusto odio dignissimos.pedita.
Text:
Text:
Text:
Summary
-
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua, ut enim ad minim veniam.
-
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat, sed ut perspiciatis unde omnis iste.
-
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur, at vero eos et accusamus et iusto odio dignissimos.pedita.
Text:
Text:
Text:
Summary
-
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua, ut enim ad minim veniam.
-
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat, sed ut perspiciatis unde omnis iste.
-
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur, at vero eos et accusamus et iusto odio dignissimos.pedita.
Text:
Text:
Text:
Summary
-
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua, ut enim ad minim veniam.
-
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat, sed ut perspiciatis unde omnis iste.
-
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur, at vero eos et accusamus et iusto odio dignissimos.pedita.
Text:
Text:
Text:
Summary
-
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua, ut enim ad minim veniam.
-
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat, sed ut perspiciatis unde omnis iste.
-
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur, at vero eos et accusamus et iusto odio dignissimos.pedita.
Updates are made available to members within 12 hours in accordance with the ThesisTracker Pro Service Level Agreement.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Equity Trustees Asset Management
30 Sept 2025
$166.90
- Equity Trustees Asset Management continues to hold an underweight position in CBA due to its unjustifiably high valuation.
- Previous analysis indicated that CBA's outperformance was largely due to a re-rating of the Price-earnings (PE) multiple rather than genuine earnings growth.
- Many factors contributing to PE expansion were deemed non-fundamental.
- The high starting valuation compared to historical averages and peers necessitated meaningful earnings upgrades to justify current levels.
- While there was a slight upgrade in earnings per share, it was primarily due to lower bad debts, which are considered a lower quality item.
- Disappointing net interest margins led to flat pre-provision profit estimates following results.
- The combination of limited upgrades, strong results from peers, and a better commodity price outlook resulted in capital being redirected away from CBA.
Summary
Blackwattle Investment Partners
30 June 2025
$184.75
- Blackwattle Investment Partners identifies Commonwealth Bank (CBA) as the largest detractor in their portfolio.
- The fund's underweight position in CBA is notable, given the index's average weighting of 10.5%.
- Despite CBA's strong brand and dominant positions in deposits and mortgages, valuation concerns are significant.
- CBA is currently trading at 3.5x standard deviations above its historical average.
- The stock has a 4x price-to-book multiple, compared to 1.3x–1.95x for peers.
- With a 29x forward PE, CBA's earnings yield is below the risk-free rate, presenting an unattractive trade-off.
- Blackwattle acknowledges limited credit risk in the near term but remains cautious about CBA's valuation.
Summary
Blackwattle Investment Partners
30 Apr 2025
$166.60
- Blackwattle Investment Partners continues to hold an underweight position in Commonwealth Bank (CBA), which has detracted from performance.
- CBA now represents 11% of the ASX 200, benefiting from passive fund flows.
- With a $280 billion market cap, CBA ranks among the world’s ten largest banks.
- It has a premium valuation of 27x earnings, significantly above the U.S. average of 13x and the U.K.’s sub-10x.
- The upcoming earnings season is expected to provide insights into margins and cost pressures.
- While respecting CBA’s market leadership, the valuation indicates limited upside and an asymmetrical investment risk profile.
Summary
Sterling Managed Investments
30 Apr 2025
$166.60
- Sterling Managed Investments continues to hold a moderated underweight position in Commonwealth Bank of Australia (CBA).
- The decision reflects a shift in risk management strategy amidst changing market conditions.
- Recent market sell-offs have led to significant corrections in various stocks, impacting their valuations.
- Despite the broader market decline, CBA's performance has remained stable, warranting a reassessment of its position.
- Sterling Managed Investments acknowledges the need to adjust their stance rather than maintain a substantial underweight holding.
Summary
BKI Investment Company
31 Mar 2025
$150.93
- BKI Investment Company continues to hold its position in Commonwealth Bank (CBA) due to its robust investment strategy.
- CBA increased its investment spending by 11% to $1.1 billion in the half-year ending December 2024.
- The investment was allocated to productivity and growth initiatives ($489 million), risk and compliance projects ($333 million), and infrastructure and branch refurbishment ($274 million).
- Years of capital expenditure have significantly enhanced CBA’s digital capabilities and streamlined banking processes.
- CBA now leads the market with 8.8 million active app users and 12.3 million daily logins.
- In 2024, CBA allocated over $800 million to protect clients against fraud, scams, financial, and cybercrime.
- A further $450 million was invested in the first half of FY2025 for similar protective measures.
- CBA’s disciplined capital management strategy and ongoing investments have driven growth, leading to superior and sustainable shareholder returns.
Summary
Blackwattle Investment Partners
30 Nov 2024
$158.19
- Commonwealth Bank (CBA) was the largest detractor, due to the Fund’s underweight position.
- The stock continues to re-rate despite no new material developments.
- CBA trades at a forward Price / Earnings ratio of about 26x, making it one of the most expensive banks globally.
- With a market cap of approximately $263bn, CBA’s valuation is 12% greater than NAB ($120bn) and Westpac ($114bn) combined.
- CBA has a 39% smaller loan book and generates 30% less profits compared to its competitors.
- The historical advantage of a large branch network is being eroded by the increased use of mortgage brokers and digital banking.
Summary
Pengana Capital Group
30 Nov 2024
$158.19
- Pengana Capital Group sold their investment in CBA and reduced holdings in NAB.
- Both banks are recognized as strong institutions with robust business models and excellent management.
- Current valuations are extremely stretched.
- Original investments were made at reasonable price to book ratios, with NAB at 75% of book value.
- There is a contrast between mediocre earnings growth expectations and record Price to Book ratios for NAB at 1.9x and CBA at 3.6x.
Summary
Blackwattle Investment Partners
31 Oct 2024
$142.75
- Blackwattle Investment Partners holds a moderate position in Commonwealth Bank of Australia (CBA), with portfolio weight significantly below the benchmark of 10%.
- CBA is recognized as a high quality bank with a strong brand and leading deposit and mortgage businesses.
- This leads to healthy net interest margins and a low cost-to-income ratio.
- CBA achieves a superior return on equity compared to other Australian banks.
- Challenges include high levels of household debt in Australia and ongoing price competition in the mortgage sector.
- Approximately 75% of new home loans are originated by brokers, intensifying competition.
- Future earnings growth is muted due to these pressures, with rising sector arrears.
- CBA’s current valuation of 25x forward EPS is significantly above its historical mean by 3.5x standard deviations.
- This valuation is notably higher than similarly profitable global peers.
Summary
BKI Investment Company
30 June 2024
$126.20
- BKI Investment Company continues to hold Commonwealth Bank (CBA-ASX) as a major investment.
- CBA's interim dividend increased from $2.10 to $2.15 per share.
- The economic conditions in Australia are sound, as indicated by CBA's performance.
- Commentary from CBA and other major banks suggests a comfortable outlook regarding economic stability, with no anticipated hard landing.
- Employment levels are expected to remain high.
- Interest rates are not projected to move significantly from current levels.
- As a result, banks are increasing lending, leading to higher profits and dividends.
Summary
Cooper Investors
30 Sept 2023
$99.85
- Cooper Investors sold their investment in Commonwealth Bank of Australia (CBA) to fund a new purchase
- They maintained an underweight position in the Bank sector
- CBA is viewed as a fantastic franchise with an exceptional management team
- Cooper Investors considers CBA to be among the world’s great banks
- Current premium valuation does not present a sufficiently attractive opportunity for a continuing position
- They express willingness to revisit CBA on a pullback in valuation
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"While CBA stands tall as a premier bank with stellar management, the current premium valuation seems to overshadow its potential. A pullback might just reignite interest for those seeking value in this otherwise exceptional franchise."
Last Updated: 30 Sept 2025
Query The Data
Frequently Asked Questions
Who is investing in Commonwealth Bank of Australia (ASX:CBA)?
Fund managers including Cooper Investors, Blackwattle Investment Partners, Pengana Capital Group, Sterling Managed Investments, BKI Investment Company and Equity Trustees Asset Management have invested in Commonwealth Bank of Australia (ASX:CBA).
Why do fund managers invest in Commonwealth Bank of Australia?
Fund managers like Cooper Investors maintain an investment in Commonwealth Bank of Australia (CBA) due to its strong franchise and exceptional management team, viewing it as one of the world's leading banks. However, they also recognize that its premium valuation limits further investment opportunities, prompting a cautious approach and a willingness to reconsider should valuations become more attractive.
What happened to Commonwealth Bank of Australia (ASX:CBA)?
Fund managers are cautious about investing in Commonwealth Bank of Australia (CBA) due to its high valuation, which they believe is not justified by underlying earnings growth. Despite a slight upgrade in earnings per share, driven mainly by lower bad debts, the overall performance has been disappointing, particularly in net interest margins. This has led to a preference for other investments with stronger fundamentals and growth potential.