Portfolio Update - November 2018
The malaise afflicting equity markets that emerged in early September has continued throughout November. As of the 30th November 2018 the ASX Accumulation Index is down -9.72% from its 30th August 2018 peak. Over the same period the Blended and Income portfolios are down -5.79% & -5.88% respectively, capturing 59.6% & 60.5% of the market downside.
Global share markets are having a healthy and overdue correction, whereby investors are now able to purchase companies at more favourable valuations. Notwithstanding this, sharp and persistent falls in equity prices tends to challenge the psychology of investors, torn between the anxiety that further falls are possible or the appreciation that value has finally emerged.
In recent weeks the Blackmore Capital portfolios have begun to utilise their 'overweight' cash positions to selectively 'top up' on companies that exhibit characteristics of earnings and balance sheet resilience, namely; Macquarie Group, Cleanaway Waste Management, Xero Limited, CSL Limited and Woodside Petroleum.
The entanglement of investor concerns around moderating global economic growth, trade disputes, and rising US interest rates suggest further volatility is more than a remote possibility. Hence, our portfolios still retain healthy cash levels of c.11-13% to provide ballast and a source liquidity if further opportunities emerge.
The Blended Australian Equities Portfolio finished the month of November down -3.27% compared to the ASX 200 Accumulation Index down -2.21%. Positive attribution for the Blended Australian Equities Portfolio was driven by Qube Holdings (QUB), Nearmap Ltd (NEA) and Starpharma Holdings (SPL). Whereas, Alumina Limited (AWC), Coca-Cola Amatil (CCL) and Cleanaway Waste Management (CWY) weighed negatively on the portfolio’s attribution.
The Australian Income Portfolio finished the month of November down -3.12% compared to the ASX 200 Accumulation Index down -2.21%. Positive attribution for the Australian Income Portfolio was driven by Qube Holdings (QUB), Insurance Australia (IAG) and Woolworths Group (WOW). Whereas, Coca-Cola Amatil (CCL), Alumina Limited (AWC) and Washington H Soul Pattinson (SOL) weighed negatively on the portfolio’s attribution.