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The MM Flagship Growth Portfolio slipped -0.49% last week while our cash position has now risen slightly to 4%. Our performance was aided by TPG Telecom (TPG) +4% and Commonwealth Bank (CBA) +3.4% while CSR Ltd (CSR) -9.7% and Altium (ALU) -7.7% dragged on the portfolio i.e. our defensives remained the backbone through this uncertain period.
Over the last week, the key change in MM’s thinking has been from a “sell the pop” to “buy the dip” attitude, while this standpoint is unlikely to last all year it’s important when we consider how we moved underweight the Resources Sector into their panic strength following Russia’s invasion of Ukraine, the plan was to re-enter at lower levels – remember only a few weeks ago fund managers were carrying their largest exposure in history to commodities making it a very crowded place to be invested. The following corrections demonstrate how the subsequent pullbacks have been very meaningful across the board:
- BHP Group (BHP) -18%, South32 (S32) -21%, RIO Tinto (RIO) -23%, OZ Minerals (OZL) -27% and IGO Ltd (IGO) -33%.
Not only are MM looking for the market to regain some of its recent losses into, and probably beyond, the EOFY we anticipate this strength to be led by the recently under pressure tech and resources names hence we feel it’s time to consider increasing our weighting to the resources sector i.e. we already hold enough tech.
