We all know that 2024 has delivered a noticeably differing performance on the sector level so far, and this particular elastic band is likely to be stretched further this morning. The Tech Sector has outperformed the Materials by a whopping 35%. After moves overnight and renewed Chinese economic jitters, we could easily see it reach 40% this FY.
- We are eventually looking for local miners to play some performance catch-up, but they need a catalyst, which will most likely need to come from Beijing.
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ASX200 Sectors CY24 todate. Source: Bloomberg
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ASX200 Sectors CY24 todate. Source: Bloomberg
Under the hood, the markets delivered even greater divergence of performance, with 5% of ASX200 stocks down 30% or more. Over the same period, the markets rallied ~1.6% before dividends, not a huge gain but still on the correct side of the ledger. This is a great example that avoiding losers is every bit as important as picking winners; one of the reasons MM Active Growth Portfolio is enjoying another solid year is that we’ve avoided 9 of the 10 names altogether while only enduring part of Corporate Travel’s (CTD) -33% decline so far this year.
- We are long-term believers in equities, a view that’s supported by the Accumulation Indexes gains over recent decades.
NB The ASX200 Total Return Index includes dividends, which is important for the relatively high-yielding Australian market.
MM is bullish towards the ASX200 Accumulation Index medium/long term
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Below we look at 3 stocks that have all endured a tough start to CY24. All are showing declines of over 30%. The question we ask is whether they are becoming cheap, especially as tax loss selling may be witnessed over the coming weeks.
