The current market environment is plagued by global macro and geopolitical tail risks, which has driven elevated volatility and uncertainty in the outlook for equities. In this report, we explore which high-quality growth companies and defensives offer attractive long-term value. We also provide an update on how the Focus Portfolio is positioned across sectors/styles.

The rapidly evolving global trade environment, particularly between the US and China, has driven significant uncertainty in the outlook for commodity demand. In light of heightened macro risks, we have reduced the Focus Portfolio’s energy sector exposure and increased our overweight to the gold sector.

After a week of turmoil markets have rebounded, as the Trump administration announced a surprising backflip on its Reciprocal Tariff Policy. This report explores what Trump’s tariff backflip means for the US and global markets.

Following the latest US tariff news, we have increased our exposure to defensives by adding Woolworths and upweighting Brambles. We have also increased our exposure to gold by upweighting Evolution Mining. These additions have been funded by the removal of Breville and WEB Travel, which both face an increasingly challenging global macro outlook.

Last week delivered a relatively uninspiring Federal budget, but some modestly good news on inflation with the release of the February monthly CPI figures. This report looks at the outlook for the Australian economy, given fiscal policy that makes government spending look too big relative to the economy.

Despite Q4 2024 earnings being strong, tariff uncertainty has weighed on the earnings outlook in 2025, with aggregate earnings seeing negative consensus earnings revisions. Furthermore, this uncertainty has materially impacted the market, driving a correction in February/March. However, some companies were caught up in the market sell-off without being materially impacted from an earnings perspective, resulting in buying opportunities which we will explore.

The Federal Government has overseen a swing back to deficit for FY2025 and through all of the ten-year forecast period. This is despite a stronger than expected labour market and higher than expected commodity prices that have helped the budget position significantly. The Government now forecasts the budget balance in FY25 will be a deficit of $27.6 bn.

The outlook for M&A activity in 2025 is broadly positive and should be supported by several key macro factors. This report explores the key M&A themes that we expect to play out in 2025 and screens the ASX for potential takeover candidates. We also assess James Hardie’s recent A$14bn acquisition of US-listed AZEK.