How to position for a changing market

The August FY16 reporting season as usual provided winners and losers. While we are likely to do some portfolio adjustments as a result of the new information released with company results, the most important question in coming months will most likely be how to position for a potentially changing macro environment. We believe that a market environment in which sector and stock performance is less dominated by bond yields and unusually high multiples being paid for earnings growth, should benefit the Fund’s performance given Alphinity’s more balanced investment approach.
Alphinity Investment Management

Alphinity Investment Management

Treasury Wine Estates, Fortescue Mining, Lend Lease and Goodman Group were some of the highlights for the Fund. Meanwhile, Brambles (CEO change), Medibank (cautious outlook) and Adelaide Brighton Cement (volumes a bit weaker), which fell a little short even though these stocks made strong contributions over last 12 months. 

We have been steadily increasing our weighting to the Resources sector, and have been overweight since June. We continue to see potential for further positive earnings revisions and are likely to keep adding to this sector.

The fund has so far balanced the Resources overweight with only a modest underweight to the yield proxy sectors of the equity market, although this underweight is more significant when positions in the Banks and Telstra are taken into consideration.

We have over the last couple of months been taking yield exposure down further, primarily by exiting property company GPT and trimming our position in Sydney Airports, although this has to some extent been offset by building the Fund’s position in better-valued Spark Infrastructure.

 


1 topic

9 stocks mentioned

Alphinity Investment Management
Alphinity Investment Management

Alphinity Investment Management is an active, boutique, equity manager based in Sydney and majority owned by its staff. Established in 2010, Alphinity has dedicated experienced teams managing both Australian and global equity funds.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment