Looking outside the box for defensive equities

Livewire Exclusive

Livewire Markets

The big four banks, Telstra, and AREITs have traditionally formed the backbone of a defensive equities portfolio, but Aaron Binsted, Portfolio Manager at Lazard Asset Management, thinks there are better opportunities elsewhere. In fact, they own neither the big banks nor Telstra in the Defensive Australian Equity Fund. He also singles out AREITs, which he says are facing several headwinds, including years of cap-rate compression, high payout ratios, and structural shifts in sub-sectors such as retail REITs.

“The payout ratios have crept up over time, they’re now at over 90% payout of both earnings and FFO for REITs, which is at the higher end of historical ranges. People should question how much dividend growth they’ll get out of those in future.”

In the full video below, he outlines an ‘out of the box’ defensive stock that does meet his standards.

Defence is the best form of attack

Aaron's Fund has historically provided capital growth and income that is consistent with the Index with less than half the drawdown, compared to the Index in negative markets. Fund out more here



3 topics

2 contributors mentioned

Livewire Exclusive brings you exclusive content from a wide range of leading fund managers and investment professionals.

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.