Optimal: Nothing defensive about valuations in defensive stocks right now

Optimal: Nothing defensive about valuations in defensive stocks right now. With fresh evidence of the structural economic growth challenge, it's no great surprise that investors continue to cluster in the same class of yield stocks across financials, staples, REITs, healthcare, and infrastructure. Problem is, the effect of financial repression and the YAAP (yield at any price) doctrine has meant that there is absolutely nothing 'defensive' about the valuations of these stocks at these price levels, such has been the relentless nature of the buying, and the perceived lack of alternatives. The resilience in yield stocks was a surprise in view of the further fall in the AUD, as carry unwind has featured in prior bouts of currency weakness. Further, the skew that we are now seeing in index concentration is very unusual by historical standards, and is one that is typically observable only at market extremes. Full report here: (VIEW LINK)


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