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The MM Growth Portfolio added +0.7% last week with cash sitting at 9%. This week we saw some clear sector rotation with tech stocks finally adding to the portfolios performance. Xero (XRO) +5.6% and Altium (ALU) +5.5% while both a2 Milk (A2M) -5.8% and Aristocrat (ALL) -4.9% were the standout losers.
As subscribers know MM has already migrated our portfolio away from value into growth names after taking advantage of surging commodity prices following Russia’s invasion of Ukraine, the broad market is now rallying in line with our view towards fresh highs and we’re considering ways to de-risk further into such strength with a number of names on our radar. At this stage, we are noticeably overweight the Tech & Healthcare names while being underweight Resources and in particular the industrials. As the market approaches fresh highs we are more focused on the sell side of the equation and while MM are huge advocates of long-term investment in equities we have no issue carrying a 20-30% cash position for a few months if we feel it’s warranted.
Obviously, the level of individual stocks at any moment in time will largely determine which are prime candidates for sale but a brief summary by group is as follows:
- Aristocrat (ALL) above $40 and HUB24 Ltd in the low $30’s.
- Altium (ALU) around $40 and Xero (XRO) in the $120-$130 region.
- BHP Group (BHP) above $55 and CSR Ltd (CSR) around $6.50.
- Commonwealth Bank (CBA) around $110 and Macquarie Group (MQG) around $120.
- Goodman Group (GMG) around $25.
If things go according to plan we envisage increasing our cash levels from the above list before assessing opportunities elsewhere as we enter the historically weak May & June period i.e. this would probably only entail selling out of 2-3 stocks.
