Rudi's View | May 25 2023
By Rudi Filapek-Vandyck, Editor FNArena
In the seemingly never-ending public debate, the world around, investment strategists at Canaccord Genuity are resolute in their assessment: equities might have proven more resilient than most expected, they remain in a bear market, and another period of weakness should be prepared for.
To illustrate the importance of making preparatory adjustments to portfolios and asset allocation, the strategists quote late US businessman, investor and diplomat Shelby Davis who's believed responsible for the adage that you make most of your money in bear markets; you just don't realise it at the time.
What Davis was alluding to specifically, explain the strategists, is that if you protect your capital in a difficult market, there is more left afterwards to compound into the future.
With this credo in mind, Canaccord Genuity has once again moved its Model Portfolio into Underweight equities alongside an Overweight allocation to fixed income.
As far as the portfolio's equities exposure is concerned, the emphasis had already been on "stable earnings" through holdings in the likes of Woolworths ((WOW)), The Lottery Corp ((TLC)) and CSL ((CSL)), combined with beneficiaries of the post-pandemic recovery such as Qantas Airways ((QAN)) and Computershare ((CPU)), while also keeping some exposure to the recovery in China through BHP Group ((BHP)) and Rio Tinto ((RIO)).
Some changes have been made with both Qantas and Computershare now replaced with Sonic Healthcare ((SHL)) and Wesfarmers ((WES)). The overall position in Resources has been scaled back to Neutral from Overweight, even though South32 ((S32)) was added to replace OZ Minerals, now part of BHP.
The Portfolio remains Underweight Australian banks.
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