Regal’s performance hit by US financials slump

By the Editorial Team · Thursday, October 15, 2026

Australian hedge fund Regal Investment Fund reported a net portfolio loss of 2.9% in September, marking its worst monthly performance since November 2024, primarily due to a 7% decline in the US financial sector. The downturn was exacerbated by hawkish monetary policies and liquidity concerns, impacting key holdings like Apollo Global Management and Bank of America, and highlighting investor anxiety over rising interest rates and sector-specific challenges.

Australian hedge fund Regal Investment Fund (RFI) experienced its poorest monthly performance in over two years during September, posting a net portfolio return of minus 2.9 percent. This marks the fund's worst result since November 2024, according to a recent update from the firm.

The decline was driven primarily by a sharp downturn in the US financial sector, which fell by approximately 7 percent over the month. Regal noted that market gains were narrowly concentrated, with technology being the sole US sector to register positive returns. The equal-weighted S&P 500 index underperformed its cap-weighted counterpart by 4.6 percentage points, a disparity not seen since 2003.

Contributing to the market pressure was a shift toward more hawkish monetary policy, as both the US Federal Reserve and the European Central Bank increased interest rates during the period. The tightening stance heightened concerns about liquidity and earnings prospects, particularly within financial stocks heavily represented in the Regal portfolio.

Among the largest individual detractors was Apollo Global Management, which fell 15 percent after capping redemptions in its flagship private credit fund for the third consecutive quarter. This move amplified broader investor worries about liquidity constraints in the private credit market. Bank of America also declined 12 percent following management’s guidance indicating a projected drop of over 10 percent in third-quarter investment banking fees. Meanwhile, shares of Charles Schwab Corp decreased 11 percent, partly due to apprehension that new artificial intelligence-driven personal finance tools could erode customer loyalty and shift cash balances to more attractive interest-yielding products.

In addition to US financials, the fund faced headwinds from its positions in UK-based entertainment companies Entain and Flutter Entertainment. Investor concern over potential increases to UK taxation weighed on these holdings, further impacting overall fund performance.

RFI securities closed the month down 1.5 percent, trading at $3.26, reflecting the broad challenges faced by the fund amid volatile sector performances and tightening central bank policies.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.