Commonwealth Bank of Australia (ASX: CBA) shares are down 0.5% to $161.82, while CSL Ltd (ASX: CSL) is down 1% to $116.48 on Friday.

In a newsletter this week, Blackwattle Large Cap Quality Fund portfolio managers, Joe Koh and Elan Miller, explain why they are underweight on the market’s largest ASX 200 bank share and overweight on the market’s biggest healthcare share.

If you’re unfamiliar with the lingo, underweight and overweight compare a fund manager’s holding in an ASX stock to its weighting in the benchmark index.

If a fund manager is overweight a stock, they hold a larger proportion of that stock than the benchmark index does.

The Large Cap Quality Fund aims to outperform the S&P/ASX 200 Accumulation Index (ASX: XJOA), after fees, over the long term.

CBA shares

CBA shares represents 10.2% of the ASX 200 Accumulation Index’s market capitalisation.

Koh and Miller said they are underweight CBA shares, and this helped the fund outperform the market in May.

They commented:

CBA provided a Q3 update, which saw its cash earnings narrowly miss consensus estimates by 1%, notwithstanding stable net interest margins and robust home lending growth of 7.1% and business lending growth of +12.5%, year-on-year.

The small earnings disappointment, combined with (in our view) expensive valuation and uncertainty around housing due to negative gearing tax changes, saw CBA’s shares underperform the S&P/ASX 200 index in May.

The night before CBA’s update, the Federal Government proposed a raft of tax changes in the 2026-27 Budget.

CBA shares experienced their biggest daily fall ever, dropping 10.2% and descending to No. 2 in the S&P/ASX 200 Index (ASX: XJO).

Koh and Miller said the Federal Budget marked “the biggest changes to the tax system since the introduction of the GST”.

The changes include replacing the 50% capital gains tax (CGT) discount for assets held longer than 12 months with a cost base inflation indexation method and a minimum 30% CGT rate; and limiting negative gearing to new builds, effective 1 July next year.

Koh and Miller expect this to adversely affect ASX 200 bank shares.

… we anticipate slower credit growth moving forward, as well as increased risk of bad and doubtful debts, given that individuals are already feeling the impact of the RBA’s rate hikes, higher fuel prices, and increased inflation.

We believe the Budget will place increased pressure on the banks’ operating margins, increasing the risk of earnings downgrades.

The managers pointed out:

Australian home loans comprise about 63% of CBA’s total loan book, of which about one third is to investors.

CBA shares are up 0.4% in the calendar year to date (YTD) compared to a 0.3% rise for the ASX 200.

CSL shares

ASX 200 healthcare shares appear to be staging a comeback after a horror 12 months amid many industry challenges.

The S&P/ASX 200 Health Care Index (ASX: XHJ) appears to have hit a pivot point on 3 June when it touched a 9-year low.

At that stage, ASX 200 healthcare shares had fallen by more than 40% over 12 months.

Since then, healthcare shares have risen 15% as value investors return to the sector, hunting bargains.

CSL shares have been a clear target, lifting 26% since 3 June.

The CSL share price commenced a downward spiral in early FY25 amid far bigger problems than sector weakness.

Koh and Miller said CSL downgraded its earnings forecast again in May after previously reaffirming guidance when the then-CEO resigned.

The managers said:

CSL now expects FY26 revenue to be around $15.2 billion (market expectations were $15.8bn) and NPATA (excluding restructuring costs and impairments) to be around $3.1 billion (market expectations were $3.35bn), both on a constant currency basis.

CSL also intends to recognise approximately $5 billion of non-cash, pre-tax impairments across FY26 and FY27, in addition to those
announced at the FY26 half-year results.

The market continues to be wary of CSL, as the new CEO is yet to be named and the competitive environment remains difficult.

Despite this, Koh and Miller have faith that this former ASX 200 blue-chip company can pull itself out of the mud.

While previously underweight this stock, the Fund has recently moved to a small overweight position given the stock’s
now more attractive valuation, which sits at a substantial discount to the ASX 200.

CSL shares are down 32% YTD and make up 2.1% of the ASX 200 Accumulation Index.

The post Why this fundie is overweight CSL and underweight CBA shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Regis Resources Ltd (ASX: RRL) shares are charging higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) gold stock closed yesterday trading for $6.45. In morning trade on Friday, shares are swapping hands for $6.58 apiece, up 3.2%.

For some context, the ASX 200 is up 0.1% at this same time.

This outperformance follows the release of Regis’ mid-year exploration update.

Here’s what’s grabbing investor interest.

Regis Resources shares lift on growth outlook

Year to date, the ASX 200 gold miner said it continued advancing priority underground and open pit targets. Regis reported this has improved its geological confidence across key growth areas as it assesses longer-term opportunities at its Duketon, McPhillamys, and Tropicana gold mines.

Regis Resources shares could get longer-term support from Duketon, with the miner declaring the initial open pit Mineral Resource declared for Beamish South. That came out at 7 million tonnes at 1.1 grams of gold per tonne for 270,000 ounces.

Also at Duketon, the miner said recent drilling at Garden Well and Rosemont Stage 3 have confirmed strong mineralisation. And ongoing drilling at Ben Hur supports the view of a potential underground mining opportunity.

At Kings Plains, situated close to the McPhillamys project, recent drilling results were said to support the potential for an open pit resource.

Regis Resources added that diamond drilling within its Tropicana Underground project continued to increase its confidence in the known mineralisation.

What did management say?

Commenting on the results helping boost Regis Resources shares today, CEO Jim Beyer said, “Regis holds a significant pipeline of opportunities, with almost 100 exploration prospects and projects at varying stages of maturity the subject of prioritised evaluation and testing across our portfolio.”

Beyer added:

At Duketon, we are encouraged by the initial Mineral Resource Estimate declared at Beamish South, and drilling will continue as we work to grow that Resource and assess its potential to support a future Ore Reserve. Ongoing drilling at Garden Well, Rosemont and Ben Hur continues to demonstrate the opportunity within the Duketon portfolio and we remain confident in our long-term underground growth pipeline.

At Tropicana, drilling across Boston Shaker, Tropicana Underground, Havana South and the Swizzler area has returned encouraging results, further reinforcing our view of Tropicana as an asset with meaningful exploration upside.

These results, including the initial Kings Plain depth extension testing, continue to validate our exploration strategy and reinforce our belief in the quality and scale of Regis’ asset base.

Looking to what could impact Regis Resources shares in the months ahead, Beyer concluded, “We see meaningful potential to grow our resource base and continue to extend mine life across the business.”

The post Regis Resources shares leaping higher today on gold mine growth outlook appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

A small-cap ASX miner is turning heads on Friday after releasing an update that has gone down well with the market.

At the time of writing, the Ioneer Ltd (ASX: INR) share price is up 7.14% to 15 cents.

Despite the gain, it has been a rollercoaster ride for shareholders. The stock is still down around 19% in 2026, but it has jumped 54% over the past 12 months.

The latest release seems to have hit the right note, with critical minerals still a major focus in the US.

Here’s what Ioneer announced.

Ioneer lands US Army-linked award

In a statement to the ASX, Ioneer said it received a conditional US Army award for land at Utah’s Toole Army Depot.

The company said the long-term lease would support the development of a critical mineral processing facility.

Fortunately, Ioneer was one of four companies selected, alongside Empire State Mines, EnergyX and REalloys.

The US Army is looking to use parts of its land to help build more domestic processing capacity for critical minerals. These include lithium, boron, graphite and rare earths, which are used across defence, energy and advanced manufacturing supply chains.

Ioneer said the award is tied to its Rhyolite Ridge Lithium-Boron Project in Nevada.

The company describes Rhyolite Ridge as the largest undeveloped boron ore reserve in the world outside Turkey. It also said the project is the only known lithium-boron deposit in North America.

Why this is a big deal

The land lease is useful, but this update is really about the bigger opportunity around Ioneer.

The US is trying to build more mineral processing capacity at home, especially for materials used in defence, energy and advanced manufacturing.

And this is where Rhyolite Ridge stands out.

It’s not just another lithium project. It has a large boron resource, which gives Ioneer another way into America’s supply chain push.

Boron doesn’t get mentioned as much as lithium. However, Ioneer said it is used in military armour, high-strength magnets, semiconductors and nuclear applications.

The company also noted that the US government added boron to its list of critical minerals in November 2025.

The US Army release said “The ability to process critical minerals on U.S. soil is a national-defence priority required for munitions, missiles, sensors, batteries, and the platforms our soldiers depend on.”

What investors will be watching now

While today’s update is a positive one, there is still plenty of work ahead.

Keep in mind that the lease award is conditional, and Ioneer still needs to keep moving Rhyolite Ridge toward development.

This means attention turns to progress on funding, approvals, construction plans and a final investment decision (FID).

Fortunately, there has been some progress on that front.

Recent reports have pointed to support from South Korean groups Hyundai Engineering and Korea Overseas Infrastructure & Urban Development for the project.

The post This small-cap ASX stock is soaring after a major US Army boost appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.