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
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Full Report attached
During October 2021 the Fund returned 1.09% versus the S&P/ASX 300 Accumulation Index of 0.10%, outperforming the market by 0.99%. An overweight position in Materials added to relative performance while and overweight position in Financials detracted from relative performance.
This World Children’s Day, 20 November, we recognise the devastating and disproportionate impact the climate crisis is having and will continue to have on children. As the most anticipated event of the year, COP26, finishes, it remains clear we have never needed more urgent action from government, business and society to respond to the climate crisis
During September 2021 the Fund returned -1.19% (after fees) versus the S&P/ASX 300 Accumulation Index of -1.89%, outperforming the market by 0.70%. An underweight position in Healthcare and an overweight position in Transport added to relative performance. Over the last 12 months the Fund has returned 36.03%, outperforming the ASX300 Accum Index by 5.17%.