August 2019
The S&P/ASX 300 Accumulation Index returned 8.05% for the June quarter, with Financials and Materials the top performing sectors and Energy and Utilities the weakest performers for the period.
The Australian market continued to rally through July with the S&P500/ASX300 rising 3%. Since the December low, Australian stocks are up close to 25% which is just under 4% ahead of the rise in the MSCI World Index.
The RBA has admitted to the domestic slowdown with rate cuts in June and July following a decline in consumption from declining house prices and ongoing soft wage growth. The RBA has called for more fiscal stimulus as monetary policy is approaching its limits. Whilst the 2015/16-style recovery in the market has been overdone, we recognise that there are some outstanding value opportunities to take advantage of in the cyclical segments of the market, should the domestic and international stimulus build. We expect to be re-positioning into these once the recovery starts to gain traction.
Ralton Concentrated Australian Equity (Australian Shares)
Woolworths Group delivered strong gains in July, continuing its strong outperformance from the June quarter. The market cheered management as they announced an intention to separate the Endeavour Drinks business.
Ralton Dividend Builder (High Yield Australian Shares)
Caltex Australia outperformed the market in July. The company saw a share price recovery in July after the stock became oversold following a weaker than expected 1H19 company profit guidance update provided on 20 June.
Ralton Australian Equity Ex 50 (Smaller Companies)
Collins Foods performed strongly in July as the company delivered a solid FY19 result confirming the positive outlook for the company. CKF is the largest franchisee of KFC restaurants in Australia and is investing in a growing network of KFC store fronts in Europe.
Ralton Leaders portfolio
James Hardie Industries performed strongly in July as the market responded positively to healthy results from US peers.