Resource Sector Portfolio Outcomes

John Robertson

PortfolioDirect has been publishing resource sector equity portfolio models since mid-2013 stratified to reflect the three development stages within the industry (from exploration to mature production). The segmented approach was designed to assist financial advisers to better match risk with investor profiles. PortfolioDirect also offers a macro overlay model based on its assessment of cyclical positioning and benchmarked against the S&P/ASX 200 resources index. Each week, PortfolioDirect reports on the investment returns from the selected portfolio of stocks. The most recent report is here: (VIEW LINK). The chart shows the returns from each of the three portfolio ‘stratas’. While a high correlation exists between turning points among the three stock groups, there have been significant differences in the overall outcomes. Strikingly, the Phase I group has been showing considerable recent strength as stocks whose prices had been most severely depressed have been among the most highly leveraged to a turn in market conditions. As expected, the Phase III group, made up of more mature production companies, displays the least volatility but without the return potential evident elsewhere in the sector.


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