Portfolio update | December 2016
Buoyed by the optimism around global growth under the next US President, the S&P/ASX 300 Accumulation Index finished the December quarter up 4.9%. For the calendar year, it added 11.8% comprising a capital return of just over 7% and the balance from dividends and other distributions.
For the quarter, Ralton’s flagship Australian Shares portfolio outperformed the Index by 1%. Overweight positions in Information Technology and Energy added most to returns, while detracting from performance was an underweight position in Materials, principally resources stocks.
QBE rallied strongly during the December quarter, while Computershare benefited from the rise in US yields triggered by the election of Donald Trump as President.
After recent political events in the US and domestic resources/energy capital spending reducing, services continuing to grow and housing likely near a peak, we believe the market starts calendar 2017 with some tailwinds. Some of the key determinants from our perspective include:
- commentary from the February reporting season
- the impact of a continued rise in US core inflation
- whether the commodities rally is sustainable
- whether the AUD continues to weaken, and
- the outlook for the banks.
In addition, we are watching closely a number of the turnaround stories we have been following.
View December 2016 reports