PORTFOLIO MANAGEMENT – AUSTRALIA

Perennial pair target ‘unloved, undervalued’ bunch of five

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 17 & 31 : 2-Dec-16

Value investing has fallen out of favour in recent years, but the August 2016 reporting season was a catalyst for renewed interest in value stocks. Stephen Bruce, a portfolio manager at Perennial, says stocks that have been dubbed "expensive defensives" began to be sold down in the wake of the reporting season, while value stocks received support due to financial results that were better than expected. Bruce and colleague John Murray identify BHP Billiton, QBE Insurance Group, AMP, Lend Lease and Macquarie Group as their top picks among value stocks.

CORPORATES
PERENNIAL VALUE MANAGEMENT LIMITED, BHP BILLITON LIMITED – ASX BHP, QBE INSURANCE GROUP LIMITED – ASX QBE, AMP LIMITED – ASX AMP, LEND LEASE GROUP LIMITED – ASX LLC, MACQUARIE GROUP LIMITED – ASX MQG, CSL LIMITED – ASX CSL, TRANSURBAN GROUP LIMITED – ASX TCL

Trade out, quality in as blue chips re-emerge

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Original article by Jessica Sier
The Australian Financial Review – Page: 31 : 24-Nov-16

Australian-listed small-capitalisation stocks have outperformed the broader sharemarket over the last 18 months or so. However, this outperformance has been reversed in the last month, and particularly in the wake of Donald Trump’s presidential election win. There has been renewed support for bank and resources stocks, due to factors such as a rise in government bond yields and commodity prices.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, PERPETUAL INVESTMENTS, UBS HOLDINGS PTY LTD, JP MORGAN AUSTRALIA LIMITED

Credit won’t predict next crisis, but gives protection

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 13 & 17 : 7-Nov-16

Alexander Funds Management MD Chris Black notes that credit markets anticipated the global financial crisis well before equity markets. He says the GFC was primarily a credit-driven event, but this will not be the case with the next financial market crash. He adds that credit will be a safer asset class when the next financial market downturn comes. Alexander Funds has delivered a return of 16.64 per cent since it was founded as Laminar in 2009, but Black cautions that investors should not expect returns similar to those in the years immediately after the GFC.

CORPORATES
ALEXANDER FUNDS MANAGEMENT PTY LTD, CROWN RESORTS LIMITED – ASX CWN

Cashed-up fund cools on property

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Original article by Daniel Palmer
The Australian – Page: 24 : 1-Nov-16

The Future Fund has posted a return of 1.5 per cent for the September 2016 quarter. Its cash holdings rose by 0.4 per cent to 22.1 per cent, compared with just 15.1 per cent for the same period in 2015. The sovereign wealth fund lifted its portfolio’s weighting toward equities by 0.6 per cent to 29.4 per cent, while its exposure to property and private equity fell. MD David Neal says the Future Fund is likely to maintain its risk-adverse profile. Its assets under management totalled $A124.65bn at the end of the quarter.

CORPORATES
AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, PORT OF MELBOURNE

Perth fundies see more upside in resources

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Original article by Tess Ingram
The Australian Financial Review – Page: 13 : 24-Oct-16

Australia’s S&P/ASX 300 Metals & Mining Index has gained 45.3 per cent so far in 2016, while the benchmark S&P/ASX 200 has risen by just 6.2 per cent. The rebound in the share prices of resources and energy stocks has rewarded investors who capitalised on a sell-off in the sector earlier in the year. WestOZ Funds Management has been progressively lifting its funds’ weightings toward the sector over recent months, while scaling back their exposure to cash.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S ASX 300 METALS AND MINING INDEX, WESTOZ FUNDS MANAGEMENT PTY LTD, WESTOZ INVESTMENT COMPANY LIMITED – ASX WIC, PACKER AND COMPANY INVESTIGATOR TRUST, NORILSK NICKEL, CAMECO CORPORATION, BELL POTTER SECURITIES LIMITED, WOODSIDE PETROLEUM LIMITED – ASX WPL, INDEPENDENCE GROUP NL – ASX IGO, WESTERN AREAS LIMITED – ASX WSA, SANDFIRE RESOURCES NL – ASX SFR

Funds shun ASX in favour of cash, property

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 27 : 19-Oct-16

Tim Baker of Deutsche Bank forecasts that Australian superannuation funds will receive some $A65bn worth of mandatory contributions in 2016-17. Discretionary contributions are expected to be around $A15bn, compared with the annual average of $A20bn. Meanwhile, Baker notes that super funds are scaling back their equity holdings and increasing their exposure to investment options such as cash, infrastructure assets and commercial property.

CORPORATES
DEUTSCHE BANK AG, AUSTRALIAN UNITY INVESTMENTS, UNISUPER LIMITED, AUSGRID PTY LTD, PORT OF MELBOURNE

Sovereign debt could well be the driver of the next share selloff

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Original article by Philip Baker
The Australian Financial Review – Page: 32 : 6-Oct-16

Australia’s benchmark S&P ASX 200 is currently trading on a forward price-earnings ratio of around 16 times, compared with its long-term average of about 14.5 times. The index reached a 2016 high of 5,587 points at the start of August, and despite a number of pullbacks it is still three per cent higher than at the start of the year. However, the prospect of an eventual end to quantitative easing by central banks is likely to put upward pressure on government bond yields, which will in turn weigh on sentiment toward equities.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, ROYAL BANK OF SCOTLAND GROUP PLC, THE GOLDMAN SACHS GROUP INCORPORATED, JP MORGAN CHASE AND COMPANY, UNITED STATES. FEDERAL RESERVE BOARD, FEDERAL RESERVE BANK OF RICHMOND, SYDNEY AIRPORT – ASX SYD, TRANSURBAN GROUP LIMITED – ASX TCL

Padley ruffles feathers of the fund managers

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 20 : 19-Sep-16

Stockbroker Marcus Padley says the emergence of separately managed accounts represents a major change for the funds management industry. Padley is best known for the "Marcus Today" investment newsletter, which was launched in 1998. Marcus Today Investment Strategists has launched two SMAs, in which the client directly owns the shares. Padley favours IT stocks such as NextDC and Aconex, and healthcare stocks like Cochlear and Mayne Pharma.

CORPORATES
MARCUS TODAY INVESTMENT STRATEGISTS PTY LTD, BELL SECURITIES LIMITED, MORNINGSTAR PTY LTD, STANDARD AND POOR’S ASX 200 ACCUMULATION INDEX, AITKEN INVESTMENT MANAGEMENT PTY LTD, NEXTDC LIMITED – ASX NXT, ACONEX LIMITED – ASX ACX, COCHLEAR LIMITED – ASX COH, MAYNE PHARMA GROUP LIMITED – ASX MYX, MEGAPORT LIMITED – ASX MP1, NANOSONICS LIMITED – ASX NAN, SPARK INFRASTRUCTURE GROUP – ASX SKI, VOCUS COMMUNICATIONS LIMITED – ASX VOC, CHORUS LIMITED – ASX CNU, SUPERLOOP LIMITED – ASX SLC, SPEEDCAST INTERNATIONAL LIMITED – ASX SDA, NETCOMM WIRELESS LIMITED – ASX NTC, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT, CREDIT CORP GROUP LIMITED – ASX CCP, FLIGHT CENTRE TRAVEL GROUP LIMITED – ASX FLT, MACQUARIE GROUP LIMITED – ASX MQG, TELSTRA CORPORATION LIMITED – ASX TLS

Resource stocks in vogue again on back of China hopes

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Original article by Jessica Sier
The Australian Financial Review – Page: 16 : 19-Sep-16

The uncertain outlook for the Chinese economy weighed on both commodity prices and resources stocks earlier in 2016. However, Australia’s resources sector is back in favour with investors, amid growing optimism about the Chinese economy. Whitehaven Coal has gained 250 per cent in the year to date, while pure-play iron ore producer Fortescue Metals Group has risen by 164 per cent.

CORPORATES
WHITEHAVEN COAL LIMITED – ASX WHC, FORTESCUE METALS GROUP LIMITED – ASX FMG, SYRAH RESOURCES LIMITED – ASX SYR, OROCOBRE LIMITED – ASX ORE, GALAXY RESOURCES LIMITED – ASX GXY, CREDIT SUISSE (AUSTRALIA) LIMITED, HSBC AUSTRALIA HOLDINGS PTY LTD, REGAL FUNDS MANAGEMENT PTY LTD, BHP BILLITON LIMITED – ASX BHP, SOUTH32 LIMITED – ASX S32

‘Sell everything’ call a distant memory

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 31 : 19-Aug-16

Global sharemarkets have defied forecasts in January 2016 of a major slump, with most key indices having recovered from a sell-off in February. Andrew Mitchell of Ophir Asset Management says equities should continue to rise, unless there is a "black swan" event. Many fund managers increased their portfolios’ exposure to cash holdings following the Australian market’s downturn in April 2015, but its rebound from 2016 lows has prompted some to reinvest in equities.

CORPORATES
OPHIR ASSET MANAGEMENT PTY LTD, ROYAL BANK OF SCOTLAND GROUP PLC, FTSE 100 INDEX, BENNELONG AUSTRALIAN EQUITY PARTNERS PTY LTD, KATANA ASSET MANAGEMENT LIMITED, BANK OF AMERICA CORPORATION, MERRILL LYNCH AND COMPANY INCORPORATED, DOW JONES INDUSTRIAL AVERAGE INDEX, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES