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Investment Committee Summary – December 2019

 

INVESTMENT COMMITTEE SUMMARY

 

As part of our ongoing commitment to active portfolio management and investment rigor, the Investment Committee meet monthly to review market activity and events of potential significance.

 

In a mirror image of December last year, financial markets look to finish 2019 with a positive tone. On the positive ledger, the committee noted phase one of the US-China trade deal improving overall sentiment, the large Conservative party victory in the UK removing hard Brexit risks, improvement in EPS revisions from low bases, positive change in the direction of global economic data, better economic data in China, benign credit spreads, and a weakening USD (relieving financial market pressure for countries with USD denominated debt).

 

On the negative ledger we continue to monitor both economic data and company earnings that despite improving from their more recent trends, are broadly still poor.  We also note that phase one of the trade deal was not all encompassing and may not lift corporate confidence, making any sentiment benefits transitory.  Hong Kong issues remain despite headlines reducing while social unrest has escalated in India.

 

We had become increasingly positive over the last few months on the trajectory for equity markets, positioning our portfolios towards the higher end of their growth ranges. The positive UK election result and trade war agreement, combined with significant central bank liquidity, is supportive of global markets. We watch for further improvement in economic data to support our positive positioning and believe upside should continue over the summer months should this eventuate.

 

Wishing you a wonderful holiday season and a prosperous New Year.

 

 

The information contained in this Investment Committee Summary is current as at 20/12/2019 and is prepared by Drummond Capital Partners Pty Ltd

Any advice in this Investment Committee Summary has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on any advice, consider whether it is appropriate to your objectives, financial situation and needs.

Past performance is not a reliable indicator of future performance. Before acquiring a financial product, you should obtain a Product Disclosure Statement (PDS) relating to that product and consider the contents of the PDS before making a decision about whether to acquire the product.