Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi James & Team Would you continue to hold APE, ALL & LNW in the consumer discretionary space? Would it be prudent to sell these stocks and re-allocate funds into a more bullish sector? With Inflation and probably one interest rate rise by the end of the year weighing on the consumer should we be avoiding these consumer discretionary stocks until the outlook improves? regards Debbie
Hi Debbie,
We give General Advice at MM hence we’ll comment on each individual stock.
The discretionary space clearly faces headwinds both here and overseas as long term bond yields test decade highs and central banks look set to hike rates further as oil prices continue to lift already stubbornly high inflation. However, we are always conscious that things look their worst near market turns.
The consumer discretionary sector is ~7% of the ASX 200 and we only hold a 4% exposure through LNW in our Growth Portfolio, i.e. we’re already underweight the sector which is down more than 8% YTD while the ASX 200 is up more than 3%.
At this stage we are comfortable with our positioning believing it’s too early to increase exposure to the sector until we get further clarification on the macro picture but we aren’t looking to reduce this stance further.
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