The gap between our funds’ PE and the market (ex-Resources and Financials) PE has opened up over the past few months to the widest since we began. This is a result of a general upward re-rating of the industrials and us being underweight four of the bubbles that have emerged since COVID-19 hit: Gold,Tech, Iron Ore and Consumer Discretionary. These four sectors make up around 28% of the market cap of the S&P/ASX 300 index and have outperformed over the last quarter. Growth expectations are high going forward for these sectors.Much of the portfolio resides in stocks with low profit growth expectations but the market environment of the last few years has not been favourable for these stocks. There are however some early signs that profit growth expectations for more expensive stocks are not being met and they are seeing subsequent falls in their share prices. Should this continue the prospect for stocks with low expectations going forward could be changing and our portfolio’s prospects improved.
See attached full report.
Ethical Partners are pleased to see Australia take the next steps to implement mandatory climate reporting with the release of draft climate standards, which we provided feedback on.
Ethical Partners have continuously called for the provision of high quality, comparable data on company’s climate governance and carbon metrics, which we believe is imperative for investors to fulfil the potential of responsible investment.
Ethical Partners have been proud to have been active supporters of the TNFD Forum over the past few years, and to provide regular feedback on the development of the official TNFD recommendations, which were launched in December, as well as to be active members of the RIAA Natural Capital Working Group.