Monthly Fund Update April 2015
May 13th, 2015
Overall demand conditions in Australia remain challenging and this was confirmed at the recent Macquarie Conference where the investment team attended briefings with the management of more than 50 of Australia’s leading listed companies over a three day period. Most sectors remain patchy, including those exposed to consumer, infrastructure or business spending. Significantly, however, the domestic environment does not appear to have deteriorated further in recent months.
In terms of our own portfolio, we continue to remain underweight companies exposed to the domestic economic cycle. The exception is in the residential construction space where building approvals continue to be strong (with the March data posting new record highs). This augers well for the Fund’s holdings in CSR and Fletcher Building. Our exposure to the consumer discretionary space has increased in recent months but this has been driven by the addition of high quality stocks with store roll-out strategies such as Lovisa (offshore roll-out) and Burson Group and outdoor media businesses, APN Outdoor and oOh!Media Limited, which are growing strongly on the back of a structural shift toward digital billboards.
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