By far the most written about and hopefully followed suggestion of 2015 has been to get exposure to US earners. Those companies that derive a lot of their revenue in US Dollars and repatriate back into the Aussie - which has fallen from above $1, to a low of 75.33c, and is now around 80c. As discussed in Monday's note, if commodities continue higher - which is a real possibility given China's more aggressive policy stance of late, if the RBA don't cut rates in May, which I think is unlikely, then the next obvious trade becomes short USD earnings - or at least sell what you've got and wait for a better point to re-enter. The Aussie Dollar has started to push higher and we're seeing some weakness creep into stocks that have performed exceptionally well YTD, largely on the back of the AUD weakness; Cochlear (COH), Resmed (RMD), Macquarie (MQG), CSL Limited (CSL), Westfield (WFD), Brambles (BXB), Amcor (AMC), Ansell (ANN) and Computershare (CPU). All of which have done spectacularly well but now look vulnerable. (VIEW LINK)
James is a Portfolio Manager within Shaw and Partners heading up a team that manages direct equity and option portfolios. He is also the Primary Contributor to Market Matters, a daily investment report that offers real market insight.
Great note James