Making a connection is at the heart of any financial adviser’s value proposition, the consultant says. But to do that, the right language must be leveraged to understand what a client’s legacy values truly are.
Getting to net-zero by 2025 will require an enormous shift of capital. This can only happen if groups with leverage apply pressure to financial services entities that are at the coal-face of change.
Blackmore Capital has sold two positions to partially fund two new stocks
Blackmore Capital’s chief investment officer (CIO), Marcus Bogdan, provided a rundown on sectors that look attractive following the January sell-off. Bogdan says, “The market was very much polarised in January, and our focus is looking at sectors that underperformed quite dramatically in January. The two sectors that stand out at the moment are healthcare and consumer staples. The pullback we saw was driven primarily from Omicron and the disruption caused on supply chains and business channels. Now that these factors are starting to recede, these two sectors are looking far more compelling.”
As Covid-19 starts to fade into the distance and Australian international borders open as of 21 February, people will start to return to stores and companies such as Coles (ASX:COL) and Woolworths (ASX:WOW) should benefit from growing food inflation. They both should continue to deliver good sales growth momentum. Other stocks sold-off include Wesfarmers (ASX:WES) and CSL (ASX:CSL), which experienced a pause in plasma collections. All very short-term stuff; its recent acquisition of Swiss drugmaker Vifor will boost earnings per share (EPS).
Supply chains are enduring a pandemic-related period of structural imbalances, prompting inflation to rise. The firm says, “The fear that inflation may not be under control has led to a sharp pivot by central banks acknowledging they are now ‘behind the curve.’ The prospect that interest rates and bond yields will rise and there will be less of a stimulus impulse saw global equity markets decline sharply in January.”
Value was a clear outperformer in January with gains in energy and material stocks driving the portfolio. BHP (ASX:BHP) and Santos (ASX:STO) were the standout contributors, while declines were led by consumer staples and healthcare, with CSL, Healius (ASX:HLS) and Wesfarmers weighing on performance.
Overall, the S&P/ASX 200 fell more than 6% in January, its worst start to the year since 2008.
There have been a few changes to the Blackmore Capital Blended, Income and Concentrated Funds. The team have added NAB (ASX:NAB) to increase exposure to the banking sector. The motive behind this is to reflect the outlook for interest rates in developed countries including Australia, and the end of quantitative easing policies. NAB is improving its performance and “execution of its strategy while its capital position will support strong dividends and further buybacks.” Miner OZ Minerals (ASX:OZL) was also added after it had a 14 per cent correction in January following its December quarter report.
The team has sold logistics player QUBE (ASX:QUB) and gold miner Northern Star Resources (ASX:NST) to partially fund the purchases of NAB and OZ Minerals.
Bogdan finishes by saying, “For 2022, equity markets face the dual headwind of tightening financial conditions and slowing earnings momentum. The sell-off in global equity markets in January reflected these concerns. Indeed, we expect further volatility in the coming months as investors adjust to a new paradigm. Nonetheless, global economies continue to enjoy strong growth and corporate earnings are expected to trend higher again in 2022, albeit at a more moderate level. Our portfolios are focused on ‘quality companies’ with strong balance sheets that remain well-placed to deliver dependable dividends to our investors.”
