- Meet the portfolio manager – Richard Ivers
- Prime Value Emerging Opportunities Fund tops performance tables
- Quick guide to keeping your cool in reporting season
- Key reasons why Aussie investors are facing an interest rate dilemma
- Looking beyond the share price – a key lesson from CBL’s capitulation
- Rotation to large caps ‘uncomfortable’ but creating opportunities
- 30 years after 1987 – how stock market crashes can make you a better investor
- Avoiding the next Vocation: Five “watch outs” for selecting stocks
- Is the market expensive? Four reasons this is the wrong question to be asking
- What makes the table-topping Prime Value Cash Plus Fund tick?
- Stocks to watch in an uncertain market: CSL
- Two big takeouts for investors from 2016
- Five reasons why absolute return investing is less volatile than index investing
- Six keys to finding value in the market
- Brexit: Implications for investors
- Difficult start to 2016 for share market – opportunities exist for high conviction stock pickers
- Prime Value’s views on current market volatility
- Short-term cycles to continue into 2015
- Some stocks cope with volatility better than others
- Reporting Season Underlines Need For Strong Fundamentals
- In the world of finance, the most dangerous thing is the thing that never moves
- 2014 shaping as a stockpickers market
- Dark Clouds On The Horizon – Risk Or Opportunity?
- Three Chances at Getting it Right
- Keeping on top of the RORO markets
- Notes from China
- Spring Cleaning The Investment Pantry
- Does Corporate Memory Have A Role In Stockpicking?
- How Do You Harvest Your Returns?
- Why Avoiding the Herd is More Important than Ever
- Safe Bets In Turbulent Times
- History: First Multinational Renaissance Business
- How Bees Invest
Rotation to large caps ‘uncomfortable’ but creating opportunities
ST Wong, 22 May 2017
The rotation away from quality to large cap stocks, which has defined the last six months on the Australian equities market, has been painful for many investors but more opportunities are appearing as a result.
The rotation has been uncomfortable and created much uncertainty, which can cause investors to panic.
It creates uncertainty into how certain companies are valued, particularly impacting quality mid-cap and small-cap stocks. This was especially so in late 2016 when the rotation caught many investors by surprise.
But we are now seeing how important it is for investors not to ‘throw the baby out with the bathwater’ and over-react, as more buying opportunities are unearthed.
As for how long the rotation will last, it is anybody’s guess. The rotation might have some way to go and we are certainly aware of that. We are slowly picking through these ideas that we have in the pipeline.
Crystal-balling in these situations is pointless. At this stage, we don’t expect a wholesale buy in the small cap sector.
We think the best way forward is to focus on individual companies, which are well-managed with sustainable earnings and attractively valued.