The Market Matters Flagship Growth Portfolio provides an active approach to investing in ASX listed large cap stocks – Click here to view
The MM Flagship Growth Portfolio slipped -4.3% last week while our cash position remains at 2%. Our performance was helped by HUB24 (HUB) +5.9%, TPG Telecom (TPG) +2.1% but it wasn’t enough to offset meaningful dips by Goodman Group (GMG) -12.4%, Macquarie Group (MQG) -11.5% and Virgin Money (VUK) -10.4%.
As subscribers know over recent months MM has migrated our portfolio away from resources into more defensive names as we took advantage of commodity prices panicking on the upside, so far we haven’t enjoyed the anticipated recovery in the tech sector as the inflation woes have sent bond yields higher than we expected, at least short-term. We believe this is no longer the same “buy the dip” bull market that investors have enjoyed post the GFC hence we feel that investors need to adopt a different approach to generate optimum returns:
- Stocks held must be in solid quality businesses where we like the fundamentals of the respective company’s over the coming years.
- Investors need to be increasingly open-minded as stock/sector swings are likely to become increasingly volatile.
- A degree of flexibility is ideal as bargains are likely to present themselves over the coming months/years as the interest rate landscape evolves.
At this stage MM is comfortable with the composition of our portfolio from a quality perspective but a 2% cash position is not ideal from a flexibility aspect e.g. we couldn’t consider simply averaging our holdings in the likes of MQG, GMG and VUK when they fell over 10% last week. Hence by definition, we find ourselves looking at positions we might want to cut or trim if/ when the opportunity arises.
