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 rallied +4.52% last week outperforming the market which gained +3.68%, our cash position remains at 1%. The tech stocks dominated the gains with HUB24 (HUB) +11.9%, Altium (ALU) +11.2% and Xero (XRO) +9.4% all contributing to the portfolio’s outperformance while Newcrest (NCM) -5.8% and Qantas (QAN) -0.2% were the only stocks which failed to advance.
While MM continues to look for a period of outperformance by the growth stocks similar to last week we do expect July to be a bumpy road even if we are correct and the market can grind higher over the coming weeks. This is a really exciting time for “Active Investors” although even we as investors might be more active than usual as the market’s time cycles compress i.e. a move that would usually take 3-6 months is unfolding in just a couple of weeks. The last few days have seen us tweak this portfolio back towards the resources sector after taking some very nice profits around March when Russia invaded Ukraine:
- MM closed our Treasury Wines (TWE) position using it as a funding vehicle for the battered resources stocks – nothing against TWE we just saw better value elsewhere.
- We bought back into OZ Minerals (OZL) following its 40% correction and topped up our IGO holding – not a major transition back towards resources but certainly a first step.
The market’s stock / sector rotation is throwing up some excellent opportunities for the nimble and prepared but to add the most alpha/value we might at times need to invest against human emotion i.e. take some losses! As the local market edges towards our target area while the US names remain further away for us to be correct on both, the likelihood is US tech should bounce as bond yields drift lower but they’re not particularly embracing the theme at the moment.
Buying into dips is far easier from psychological perspective than selling rallies, especially when stocks are showing a loss but this is what MM can see ourselves doing in July as we look to increase our flexibility for another potential leg lower for stocks:
- The two stocks we’re holding are front and centre in our thought process are CSR Ltd (CSR) and Qantas Ltd (QAN) i.e. these are the most likely positions to be cut to add the abovementioned flexibility, CSR at a loss and QAN around breakeven.
However, in today’s rapidly evolving market we must remain flexible and open-minded with prices likely to be an important determinant at the time e.g. it might be only tech names if they regain their mojo through July.
