Team Insights – Q3 September 2018

  • Slightly increasing our weight to Australian equities from the US on valuations grounds.
  • Significantly overweight value and quality over forecast growth (avoid stretching the DCF).
  • Maintain a low weighting to local banks despite dividend support (potential tail risk high).
  • Increasing weight to alternates and cash – remain underweight bonds.
  • Adding to emerging markets exposure as valuation is difficult to ignore.
  • Despite rich valuations in the US and other equity indices, many good businesses have fallen to their lowest
    valuations ever (saying that, underlying conditions have been favourable and we worry about over-earning
    risk)
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