The Australian equity market continues to deliver strong monthly returns as we recover from COVID-19 and governments and central banks provide strong economic support. Consensus earnings revisions continue to be positive (source: UBS) and market expectations for double digit industrials earnings growth over the next two years is reasonable, in our view. While in some markets (cypto, SPACS, US Tech, meme stocks) there are clearly excesses, driven by liquidity and loose monetary conditions, there is still moderation and appealing valuations in selected areas of equity markets. For instance in the US it has been a small number of large Tech stocks leading the market’s gains while returns in general industrials have been more modest. The NASDAQ has outperformed the Dow Jones Industrials by around 98% over the last five years, with much of the excess gain occurring over the last twelve months. Australian equities (which have also underperformed the NASDAQ by an even greater margin) valuations’ appear reasonable in our view which places the Australian market in a relative better position should some of the global excesses unwind – Full commentary in the attached including why we like BLUESCOPE, QANTAS, GRAINCORP, MACQUARIE, IAG and WESTPAC at the current time.
ESG AND ENGAGEMENT UPDATE
Ethical Partners is proud to be part of over 40 collaborations across the investment industry and with civil society. We believe it is crucial for investors to collaborate, as we see collaboration as both a powerful way to compel companies and policy makers to address issues and a way to advance conversations on these issues.
Full Report attached
The tragic human rights situation currently unfolding in Myanmar holds particular significance to our Sustainability Analyst Georgina. Please read Georgie’s poignant thoughts on her visit to the camp, our expectations on our portfolio companies in regard to Myanmar, and why Ethical Partners has recently signed on to the Investor Statement on Human Rights and Business Activities in Myanmar.
As members of the Investor Group on Climate Change, Ethical Partners Funds Management strongly endorses its new roadmap released today in conjunction with the CDP and the Principles for Responsible Investment. It is entitled: "Confusion to clarity: A plan for mandatory TCFD-aligned disclosure in Australia".
Ethical Partners is proud to be part of over 40 collaborations across the investment industry and with civil society. We believe it is crucial for investors to collaborate, as we see collaboration as both a powerful way to compel companies and policy makers to address issues, but also to advance conversations on these issues amongst the investment community.