Market outlook: Currency wars, deflation worries, political election cycles and a corporate survival mode will continue to put downward pressure on growth rates and interest rates. We continue to favour an investment strategy with a dominant sustainable yield aspect due to the weak growth outlook. Financials offer the best yield aspect while Industrials offer the best mix of growth and yield. The long term series analysis using equal weighted indices and forward multiples helps to sieve the best size, style and sector mix in the Australian market. Preferred Size, Style and Sector mix: Small Cap MITCH (i.e. Media, Information, Telco, Consumer and Health) stocks that deliver exposure to the new economy are the preferred Small Cap Industrials. Best size to sector mix: Small Cap Industrials. Size category in order of preference: Small, Mid and Large. Sector category in order of preference: Industrials, Financials and Resources. (VIEW LINK)



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