The yield rally may have paused for breath

Whilst there are some signs that the yield rally may have paused for breath, with popular plays CBA and Telstra stalling or re-tracing some ground in the last month or two, we continue to worry about the extent to which this market is driven by sentiment and policy rather than fundamental value. In this environment, with the market fully valued, the portfolio continues to be underweight the expensive defensive stocks, the banks and other overvalued yield plays, and to be invested in a select range of opportunities with excellent management, quality operations, solid recurring earnings and strong balance sheets. The portfolio also retains a high cash position, which remains ready to be deployed into any opportunities that present themselves in the short term. Major changes in the portfolio during March included establishing a position in G8 Education. The Fund bought stock in Genworth Mortgage Insurance Australia, Sky Network TV and Steadfast and took profits in Kathmandu, Monash IVF and J B Hi Fi. Please read the full report and disclaimer here: (VIEW LINK)