Although earnings revisions have slipped back into negative territory again, the proportion of downgrades to upgrades remains reasonably normal by historical standards. Despite lingering concerns around the economic outlook, there is no evidence of a significant worsening in the downgrade cycle for now.
29th Nov, 2023
After a lacklustre set of results from the banks, the portfolio is moving further underweight the banks, trimming NAB by 2%. At the same time, we are adding Steadfast Group at 2% to increase our weighting in the insurance sector, which unlike the banks has cyclical tailwinds over the next 12-24 months.
22nd Nov, 2023
We remain underweight the two major supermarkets - Woolworths (WOW) and Coles (COL). Supermarkets’ earnings received a ‘sugar hit’ from food inflation in recent years, but there is a risk this tailwind is easing. Cost pressures and elevated valuations are additional reasons for our underweight.
15th Nov, 2023
Copper demand is poised to increase over the next decade. Despite facing challenges in traditional cyclical sectors like construction, manufacturing, and appliances, copper demand should remain resilient, driven by an overriding trend: the global energy transition.
8th Nov, 2023
Infrastructure (and ‘infrastructure-like’) companies have lagged the broader ASX 300 since late June, amidst the ongoing headwind from rising bond yields. Despite the recent underperformance, the outlook for infrastructure remains positive, especially at this point in the economic cycle.
25th Oct, 2023
Recent updates from the ASX-listed general insurers, alongside the declaration of an El Niño event by the Bureau of Meteorology, have reinforced our constructive outlook for the domestic insurance sector, with our investment thesis for Insurance Australia Group (IAG) remaining intact.
18th Oct, 2023
Australian shares have been under pressure in recent months, largely due to ongoing strength in global bond yields. At a stock-specific level, this pullback has created attractive buying opportunities in select companies that have been oversold despite their strong fundamental outlooks.
11th Oct, 2023
The lithium sector continues to exhibit significant volatility. Critically, however, a positive structural outlook for lithium remains intact, which should support attractive long-term lithium prices and, by extension, significant cash generation from lithium producers.
27th Sep, 2023
Favourable supply/demand dynamics in the global energy market have pushed the price of oil >30% higher since late June to ~US$94 per barrel. The resilience of major economies and the lifting of pandemic lockdowns in China have contributed to robust global energy demand this year, while cuts from OPEC+ have tightened supply.
20th Sep, 2023