• Marcus Bogdan

November 2019 - Portfolio Update

Investor sentiment remains exuberant, with central banks having created a very supportive backdrop for global equities. With the prospect of interest rates remaining in the deep freeze for the foreseeable future, investors have become increasingly dependent on dividends as a valuable source of income.

Nevertheless, we are mindful that the rise in company valuations leaves equities reliant on a rebound in earnings growth and economic activity in the coming months. With the ASX 200 up around 20 per cent over the rolling year, prudence suggests that the ‘easy money’ may have been made already.

In recent months there has been a noticeable rotation toward value and cyclical stocks in expectation that the global economy may be on firmer footing. Ultimately, the question of whether current equity market valuations are sustainable depends on further evidence of a recovery in the global business cycle.

Blended Australian Equity Portfolio  |  Australian Equities Income Portfolio

The Blended Australian Equity Portfolio finished the month of November up 4.74% compared to the ASX 200 Accumulation Index up 3.28%. Positive contribution for the Blended Australian Equity Portfolio was driven by Caltex (CTX), Cleanaway Waste Management (CWY), and Brambles (BXB). Whereas, News Corporation (NWS), CSL Limited (CSL), and Cooper Energy (COE) weighed on attribution.

The Australian Income Portfolio finished the month of November up 4.15% compared to the ASX 200 Accumulation Index up 3.28%. Positive contribution for the Australian Income Portfolio was driven by Caltex (CTX), Cleanaway Waste Management (CWY), and Macquarie Group (MQG). Whereas, Viva Energy REIT (VVR), Transurban (TCL), and ASX Limited (ASX) weighed on attribution.