June 2019
The S&P/ASX 300 Accumulation Index returned 1.75% for the month of May, with Financials and Materials the top performing sectors and Consumer Staples and Energy the weakest performers for the period.
Domestically, the RBA has admitted to the domestic slowdown with a rate cut in June 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.
The portfolio should continue to perform well as we move through this phase of the cycle and the market’s premium growth and quality stocks begin to unwind their extreme valuations.
Ralton Concentrated Australian Equity (Australian Shares)
Aristocrat Leisure delivered a strong 1H19 result which saw a restoration of investor confidence in management during May.
Ralton Dividend Builder (High Yield Australian Shares)
ANZ Banking Group contributed to portfolio returns during April, after delivering a solid result driven mostly by very low impairment charges and a positive market reaction to the Federal election.
Ralton Australian Equity Ex 50 (Smaller Companies)
oOh!Media performed strongly during May due to the combination of an improving outlook for the consumer and evidence that the company has managed short-term headwinds well.
Ralton Leaders portfolio
Northern Star Resources outperformed the market in May. The company remains focused on delivering value from Pogo by growing reserves and production