Viewpoint: Bullish
One excellent way to “play” our view towards Australian tech is via the BetaShares ASX200 Tech ETF (ATEC), buying this $190m ETF alleviates the individual stock risk in this volatile space e.g. 50% of the sector has fallen more than 10% in 2021 with the worst 3 averaging a decline of 45%.
The Australian IT Sector popped +2.8% in a down market yesterday with ALU leading the gains following its takeover bid however with almost 80% of the sector rallying the gains were clearly very broad based.
Local bond yields continue to drift lower even while the press is full of inflation and rising interest rates / bond yields.
The ASX200 again scaled fresh all-time highs on Monday but on a day when the banks struggled following regulator AUSTRAC’s investigation into money laundering at National Australia Bank (NAB) it was one step too far for the index to close above 7300.
BetaShares ASX200 IT ETF (ATEC) is an ETF incorporated in Australia that aims to track the performance of the ASX200 Technology Index (before fees and expenses). The Index provides exposure to leading ASX-listed companies in a range of tech-related market segments such as information technology, consumer electronics, online retail and medical technology.
ALU +39.03%: Our most recent purchase in the MM Flagship Growth Portfolio Altium (ALU) received a takeover approach over the weekend from Nasdaq Listed Autodesk at $38.50 a share which was a ~40% premium to last and a ~43% premium to our entry price of $26.97 about 2 weeks ago.
ASB +4.02%: We talked about shipbuilder Austal (ASB) last week flagging their move into steel ship production in the US and today we saw an incrementally positive update towards that end.
This morning the ASX200 appears poised to again test the 7300 area, if we assume the local index has already seen its low for June and the last couple of months have set the benchmark for the current breakout by Australian stocks investors should expect to see a test of 7400 in the coming weeks, a move that shouldn’t be hard to comprehend as the banks maintain their bullish charge, the average gain of the “Big 4” in 2021 is already over 28%, and that’s before we even consider their attractive dividends.
Crude oil has been a fascinating beast over recent years including front month futures trading deeply into negative territory for the first time in history back in April 2020, this phenomenon was blamed on too many traders positioned the same way having to close out positions before the barrels of oil ended up on their doorstep .
