A strong future thematic: Roads of the 21st Century

A strong future thematic: Roads of the 21st Century. The May Federal Budget delivered a sharp hit to consumer sentiment, and reductions in government spending will equate to around 0.5% to 0.8% of GDP for the next three years. The household sector is likely to bear the brunt of the policy changes, which is a clear negative for the consumer discretionary space, in particular retail stocks. Following our exit from Super Retail Group in January, the Fund has no direct retail exposure although we will be continuing to monitor the space closely. On a positive note, the Budget laid the groundwork for resources to be diverted into infrastructure spending, including the plan to build the roads of the 21st century. This could provide a strong thematic for the future and will focus our attention on stocks such as Seymour Whyte, Cardno and MACA Limited which could all be future beneficiaries.