US data surprise puts spotlight on rates: Chris Stott, CIO, Wilson Asset Management
US data surprise puts spotlight on rates: Chris Stott, CIO, Wilson Asset Management. Currently we hold around 40% cash, which compares to our long-term average of 33% since inception over 15 years ago. Our cash weighting is a reflection of our ability to find undervalued growth companies that fit our investment criteria. Value is becoming harder to find after the market's 42% increase in the last two years, however we are poised with our cash weighting when the opportunities arise. In terms of market outlook, interest rates remaining low for the next 2-3 years bodes well for investors looking for yield. The major banks and Telstra have been beneficiaries of this in recent years. With US economic data surprising on the upside in recent times, we think there is scope for interest rates to rise earlier than expected. This is a key theme we are watching over the next 12months.