Pengana Emerging Companies Fund: Our preferred exposure is quality financial stocks

Pengana Emerging Companies Fund: Our preferred exposure is quality financial stocks. Over the past six months we have progressively reduced our cyclical stock exposure (especially building material related stocks) into share price strength, as greater numbers of undervalued growth stocks have come to our attention and accordingly added to the portfolio. Our preferred exposure to cyclical sectors continues to be through quality financial service stocks. We are expecting asset managers Treasury Group, Perpetual, IOOF Holdings and HFA Holdings to deliver strong double digit profit growth in each of the next two years. The group of four trades on an average price earnings ratio of only 13.2 times next year's earning's, have an average dividend yield of around 6% fully franked and exhibit balance sheets that are very lightly geared.