After the sharpest market rally in modern history, equity markets finished the December quarter on a high note and have continued their strength into the new year.
Yet the recovery hasn’t been across the board. Amid an aggressive factor rotation from growth/quality to cyclical/value in the Australian market, the best performers in recent months have overwhelmingly been cyclical value stocks. It is particularly true for businesses that suffered significant disruption during the COVID-19 lockdown, such as those leveraged to tourism and travel. However, many of these value stocks are high risk, hiding weak financial health and deteriorating fundamentals, with earnings lagging their share price recoveries.
Value rotations are typical during post-recession recoveries. Over the past decade, these rotations have only been short-lived before a rotation back to quality and growth.
We explore these themes in our Quarterly Fund Investor Update recording. Tim Lincoln, Co-Founder and Chief Investment Officer, Matthew Swartz, Portfolio Manager, and Kien Trinh, Head of Research, also provide an update on the quarterly performance of our Managed Funds.
To discuss the future of your investments in detail, book in a free consultation with a Lincoln representative.
To discuss the future of your investments in detail, book in a free consultation with a Lincoln financial expert.