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Active Income Portfolio

For those seeking a sustainable income strategy, with a difference.

About The Active Income Portfolio

About the Active Income Portfolio

Our philosophy at Market Matters has always been around active management, and our income portfolio stays true to label. Combining an active approach to income producing equities, ETFs and listed Income Securities such as Hybrids, the portfolio will satisfy those looking for sustainable income with significantly less volatility than the market.

Portfolio Performance
Portfolio 1M 3M 6M 1y 3y pa ITD pa*
ACTIVE INCOME 1.94% 1.12% 4.30% 8.65% 9.38% 8.32%
RBA CASH RATE +4% 0.70% 2.05% 4.12% 8.15% 5.94% 5.17%
VALUE ADD +1.24% (0.93%) +0.18% +0.50% +3.44% +3.15%
* Inception date 05/07/2017
Portfolio Holdings trade now
COMPANY CODE STOCK NAME WEIGHT (%) RISK TIME HORIZON ENTRY DATE ENTRY PRICE ($) LAST PRICE ($) DIVIDENDS ($) DAILY CHANGE (%) GAIN / LOSS (%)
AGL AGL Ltd 4 Moderate Long 23/02/2023 7.50 8.93 0.43 0.00 24.80
ANZPI ANZ Capital Notes 6 6 Low Long 8/07/2021 100.33 103.10 12.38 0.00 15.10
APA APA Group 5 Moderate Medium 26/05/2023 9.82 8.35 0.56 0.00 -9.27
BHP BHP Group 8 Moderate Long 11/12/2019 40.38 45.77 13.52 0.00 46.83
CBA Commonwealth Bank 6 Moderate Medium 13/03/2020 61.33 114.64 21.05 0.00 121.25
CBAPG Commonwealth Bank Hybrid 5 Low Medium 09/04/2018 100 102.40 33.46 0.00 35.86
CNI Centuria Capital Group 4 Moderate Medium 29/07/2022 2.065 1.74 0.17 0.00 -7.51
DXS Dexus Property Group 4 Moderate Medium 13/12/2022 8.02 7.30 0.52 0.00 -2.49
GSBG25 Aust. Govt. Bond 3.25% 21.04.2025 6 Low Long 11/05/2022 100.54 99.02 3.79 0.00 2.26
MTS Metcash 5 Moderate Medium 9/12/2020 3.5 3.92 0.88 0.00 37.14
NAB National Australia Bank 7 Moderate Medium 15/12/2022 29.64 33.93 2.39 0.00 22.54
NABPF National Bank Hybrid 5 Low Long 21/03/2019 100 105.79 27.61 0.00 33.40
NABPI NAB Capital Notes 6 5 Low Long 13/07/2022 98.94 104.10 11.77 0.00 17.11
NHC New Hope Coal 4 High Medium 22/11/2022 5.55 4.64 0.80 0.00 -1.98
OZBD BetaShares Australian Composite Bond ETF 5 Low Long 13/04/2022 45.28 43.92 2.64 0.00 2.83
TLS Telstra Group 5 Low Medium 9/06/2021 3.43 3.71 0.80 0.00 31.49
WBCPK Westpac Hybrid 5 Low Long 7/09/2022 100.40 103.01 11.65 0.00 14.20
Portfolio cash position: 9%
Recent Sales trade now
Company code STOCK NAME WEIGHT(%) RISK TIME HORIZON EXIT DATE ENTRY PRICE ($) CLOSE PRICE ($) DIVIDENDS ($) GAIN / LOSS (%)
ORA Orora 4 Moderate Medium 3/04/2024 2.56 2.24 0.05 -10.55
MFG Magellan Financial Group 4 High Medium 08/01/2024 8.73 9.09 0.93 14.78
WES Wesfarmers Ltd 4 Moderate Long 16/11/2023 47.85 53.94 4.16 21.42
GEM G8 Education 3 Moderate Medium 22/08/2023 1.29 1.08 0.06 -11.63
PPT Perpetual 4 Moderate Medium 27/06/2023 24.7 25.4 2.83
MXT MCP Master Income Trust 5 Low Long 15/06/2023 2 1.91 0.49 20
AGL AGL Energy 1 Moderate Medium 21/04/2023 6.95 8.59 23.6
TLS Telstra Corp Ltd 2 Moderate Medium 21/04/2023 3.43 4.27 0.3 33.24
WES Wesfarmers Ltd 2 Moderate Medium 21/04/2023 47.85 52.01 2.69 14.32
SGP Stockland 4 Moderate Medium 08/02/2023 4.18 4.01 0.26 0.22
PDL Pendal Group 4 Moderate Medium 12/01/2023 4.2 3.61 1.67 25.71
BHP BHP Group 2 Moderate Long 08/12/2022 38.56 46.42 10.16 46.73
AGL AGL Energy 3 Moderate Medium 08/12/2022 6.83 8.07 18.15
APA APA Group 4 Moderate Medium 08/12/2022 9.75 11.03 13.12
SSM Service Stream 4 High Medium 22/11/2022 1.565 0.745 0.05 -49.2
BOQ Bank of QLD 6 Moderate Medium 17/08/2022 8.7 7.37 0.31 -11.72
APA APA Group 4 Low Medium 10/08/2022 8.59 12.14 0.53 47.5
CWNHB Crown Resorts Hybrid 4 Moderate Medium 29/07/2022 98.26 102.75 3.02 7.64
IFL Inisgnia Financial 5 Moderate Medium 13/07/2022 3.59 2.73 0.4 -12.81
MFG Magellan Financial Group 3 Moderate Medium 13/07/2022 33.85 12.15 1.57 -59.47
SIQ Smart Group 5 Moderate Medium 13/07/2022 6.98 6.62 1.43 15.19
WDS Woodside 1.45 High Medium 15/06/2022 29.76 32.54 2.3 17.05
IGL IVE Group Ltd 3 Moderate Medium 11/05/2022 2.28 1.8 0.66 7.89
AGL AGL Energy 3 Moderate Long 03/05/2022 5.35 8.38 0.16 59.63
NSR National Storage REIT 4 Moderate Medium 13/04/2022 2.04 2.65 0.09 34.31
XARO ActiveX Ardea Real Outcome Bon 5 Low Long 13/04/2022 26.47 25.28 1.6 1.55
AWC Alumina Ltd 4 Moderate Medium 24/02/2022 2.2 1.95 -11.36
DXS Dexus/AU 4 Low Long 25/11/2021 9.2 11.27 0.23 25
IAG Insurance Australia Group Ltd 6 Moderate Medium 11/11/2021 4.69 4.47 0.13 -1.92
NAB National Australia Bank Ltd 6 Moderate Long 4/11/2021 18.71 28.7 1.35 60.61
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Recent Opinion for the Income Portfolio

Interest Rates / Bond Yields

Australian 3-year bond yields edged higher last week as hopes for rate cuts in the near future fade. Global inflation appears to be increasingly sticky, and this concern will increase if Middle East relations deteriorate further, sending oil prices higher in the process. In the short term, a test of 4% wouldn’t surprise us, but ultimately, we’re targeting another leg on the downside through 2024/5.

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BHP Group Ltd (BHP) $44.25

The “Big Australian”, as it is often referred to, has been touched on a number of times in 2024; we believe BHP is worth accumulating into dips below $40 and reducing above $50 – boring but effective over recent years. The one area we will be watching carefully is if debt levels, and if they do start to impinge on the stock's dividend, we could look elsewhere in the sector.

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Interest Rates / Bond Yields

Australian 3-years continued to chop around last week, taking more of their lead from US data and Fed comments rather than local news. Local bonds have remained in a tight holding pattern since the start of 2024, trading between 3% and 4%. Our preferred scenario is we see another leg lower by yields through 2024/5 of a similar magnitude to the decline from its post-COVID high in November last year.

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Orora (ORA) $2.32

There are two components to this business, the existing operations comprising Australasia and North America and the recent acquisition of Saverglass in Europe., which makes high end spirit bottles for the likes for Grey Goose and Glenfiddich. While the stock has been under pressure for a while, weighed down by the market's expectations of softer earnings from Saverglass, it was a surprise to see the North American distribution business struggle, and this was the main reason for the share price reaction in our view.

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Interest Rates / Bond Yields

US bonds appeared to forget Friday's PCE print last night, focusing instead on the manufacturing PMI, which increased to 50.3 last month, the highest and first reading above 50 since September 2022, up from 47.8 in February, i.e. the likely trigger for stocks to fall away throughout the session. The US economy remains strong, which could delay the Fed's timing of rate cuts; at MM, we believe cuts are coming but probably at a slower pace than many expect/hope for. 

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APA Group (APA) $8.34

APA is the largest owner of natural gas transmission in Australia, contracting with energy retailers to provide transmission from gas production fields to major cities. Macquarie posted a good note on the regulated utility yesterday morning, upgrading the stock from neutral to outperform and increasing its price target by 60c to $9.40, implying ~12% upside in the share price along with a ~7% yield.

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First Up

As the market slips into the Easter long weekend, some profit-taking felt evident on Tuesday, no great surprise considering the index has rallied over 15% from its November low. The afternoon selling wasn’t overly aggressive, but as we touched on yesterday morning, the markets are a touch bullish and long; hence, some book-squaring/selling by the weak longs didn’t encounter any significant resistance. One of the main themes of 2024 to date has been the strong getting stronger and often the weak getting weaker, even as the ASX200 forged to fresh all-time highs. A quick glance at some sectors three months into the year tells the tale: remember, the index is up a healthy +2.5%.

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Interest Rates / Bond Yields

Australian 3-years edged lower last week, taking more of its lead from the FOMC than the strong local employment data. However, a cursory glance at their chart shows they’ve been in a holding pattern through 2024, trading midway between 3% and 4%. Our preferred scenario is that we will see a test of the former over the coming months.

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Centuria Capital Group (CNI) $1.80

We have discussed CNI a number of times over the last year as the position weighed on portfolio performance. Fortunately, we held our nerve, but prudent portfolio management precluded us from increasing our positions. However, we will review our position if/when we see another ~10% on the upside, although its yield is particularly attractive for our Income Portfolio.

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History of Actions for the Income Portfolio

OZBD
UPDATED 15/04/2024 10:18
MM remains bearish toward Australian bond yields in the medium-term
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BHP
UPDATED 09/04/2024 09:51
MM remains long and bullish on BHP
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BHP
UPDATED 09/04/2024 09:49
MM remains long and bullish toward BHP
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OZBD
UPDATED 08/04/2024 09:43
MM remains bearish toward Australian bond yields in the medium-term
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ORA
UPDATED 03/04/2024 10:15
MM are selling ORA in the Active Growth & Income Portfolios, taking a loss around $2.30
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ORA
UPDATED 03/04/2024 10:12
MM has turned neutral ORA after yesterday’s downgrade
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OZBD
UPDATED 02/04/2024 09:35
MM remains bearish toward Australian bond yields in the medium-term
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CBA
UPDATED 27/03/2024 09:39
MM likes both CBA and S32 through 2024
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APA
UPDATED 27/03/2024 09:37
MM remains long and bullish APA for income
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OZBD
UPDATED 25/03/2024 09:00
MM remains bearish towards bond yields in the medium-term
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