Macro outlook: The herd mentality in the market has driven investors into the same market darling sector and stock exposures. The defensive yield and macro growth sectors are now trading at historical high premiums and delivering relatively low yields. The risk in global growth and US rate cycle can unwind the premium in the high geared defensive yields and overpriced growth sectors as the herd hits the exit. The global and local growth risk continues to favour small caps over large caps in the industrial sector. We maintain our preference for new economy exposure through MITCH (Media, Information, Telecommunication, Consumer and Health) sectors. Preferred picks in Commercial & Professional Services: BXB, CCP and IPH. Preferred picks in Consumer Services: AGI, ALL, CKF, MTR and RFG. Preferred picks in Media: APN, APO, FXJ, OML and VRL. Preferred picks in Staple: A2M, BAL, BKL. Preferred picks in Health Care: MYX and SRX. Preferred picks in Information Technology: ACX, ALU, GBT, HSN and IFM. Preferred picks in Telecommunication Services: SDA, SPK and TLS . (VIEW LINK)
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