Quant Strategy Portfolio | July update – Manage risk for reporting season

Strategy outlook: We maintain a bullish long term view on the Australian equity market to reach 6500 in 2016. Global macro uncertainties, falling growth outlook and the RBA remaining in easing bias has made equities the preferred risk/return option for investors wanting better than bond yield return in an environment where employment, disposable income and standard of living are falling. We remain positive on yield and currency trade, while expecting substantially higher volatility over the next month as US and domestic reporting season challenges the multiples and the sustainability of the yield outlook for the market. Portfolio changes: AHG, ICQ and RIO were added while CAR, CPU and KMD were removed. (VIEW LINK)