Rudi’s View: Aristocrat, BHP, Qantas & Westpac

Always an independent thinker, Rudi has not shied away from making big out-of-consensus predictions that proved accurate later on. When Rio Tinto shares surged above $120 he wrote investors should sell. In mid-2008 he warned investors not to hold on to equities in oil producers. In August 2008 he predicted the largest sell-off in commodities stocks was about to follow. In 2009 he suggested Australian banks were an excellent buy. Between 2011 and 2015 Rudi consistently maintained investors were better off avoiding exposure to commodities and to commodities stocks. Post GFC, he dedicated his research to finding All-Weather Performers. See also "All-Weather Performers" on this website, as well as the Special Reports section.

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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