The Market Matters Flagship Growth Portfolio provides an active approach to investing in ASX listed large cap stocks – Click here to view
The MM Growth Portfolio fell -2.02% last week which is never nice to see but it noticeably outperformed the market which fell -3.3% i.e. it paid off to be underweight the resources. Cash now sits at 2%. We again saw some clear sector rotation with the defensives improving, in our portfolio we saw BHP Group (BHP) -14.1%, HUB24 (HUB) -8.1% and Newcrest (NCM) -4.8% while in the winner’s enclosure we saw Virgin Money (VUK) +4.8%, Goodman Group (GMG) +4.3% and Qantas (QAN) +2.8%.
As subscribers know, MM has already migrated our portfolio away from value into growth / defensive names after taking advantage of surging commodity prices following Russia’s invasion of Ukraine, the question I know many are now asking is when do we look to buy back into the likes of BHP, OZL etc. Although we followed our flagged intention to pick up some Woodside (WPL) into weakness yesterday it was notably only a small 3% allocation, there are a number of moving cogs in this equation:
- We have the increasing headwinds of central banks raising rates and China locking down its economy weighing on the prospects for global growth causing major risks for the resources names in the process.
- The markets heavily overweight the resources hence there’s a distinct possibility of a short sharp correction hence we won’t be going “all in” too soon although this moves already looks like it’s underway.
Overall it’s unlikely MM will be substantially overweight the Resources Sector unless we see another 10% downside while quality will be very much our focus.
