Portfolio Changes - September 2018
Recent changes to the Australian Equity Income Portfolio
Sold Brickworks Limited (BKW)
We have sold our position in Brickworks following its FY18 result. Whilst underlying growth was strong and ahead of market expectations, the result was driven by activity in the Property segment, whereas the Building Products business experienced ongoing pressure from rising energy costs. The outlook comments also raised concerns over the availability of bank finance for housing which is causing project deferral. The decision to exit the holding is consistent with positioning the portfolio to insulate and where possible, benefit from rising energy prices.
Increased BHP Billiton (BHP) & Woodside Petroleum (WPL) We added to these existing resource and energy exposures as supply pressures are building in global energy markets and commodities have corrected amid US dollar strength and trade disputes. Both these stocks have lifted returns to shareholders as companies across the sector have adopted greater capital discipline. BHP is also expected undertake capital management post the sale of its US onshore energy business.