Australia’s leading fund managers are actively looking for value in sectors that fell out of favor last financial year, particularly technology and healthcare, believing many stocks were unfairly punished amid market volatility. The ASX technology sector, in particular, has become a popular hunting ground after a sharp sell-off in the March quarter, amid fears that advances in artificial intelligence could displace traditional software businesses.
The Foragers Australian Shares Fund, led by chief investment officer Steve Johnson, has cut its cash holdings from 20 per cent to about 5 per cent, placing significant bets on companies perceived as “AI losers”. Johnson believes the market has overreacted, making some companies look too cheap. Forager recently acquired Gentrack, a utility software developer, and has increased its positions in sports tech provider Catapult and financial services software business Bravura. Similarly, Airlie Funds Management has broadened its technology exposure to include Life360, Xero, and Carsales, branching out from CSL and Charter Hall. Also drawing attention beyond the healthcare sector, Merlon Capital has started positions in global medical device company Cochlear, and is doubling down on ResMed, a leader in cloud-connected medical devices, and CSL, a global biotechnology company.
Despite the consumer discretionary sector being hit by the Reserve Bank of Australia’s interest rate hike, some investors are cautiously re-entering the space. Glenmore Asset Management’s Robert Gregory advises positioning in these stocks ahead of the end of the RBA’s hiking cycle, adding Universal Store to his fund. Ron Shimgar of Tamim Asset Management echoed the sentiment, buying Accent Group, Skin Candy, and Kogan.com, expecting a significant rerating by the time the RBA cuts rates. In contrast, Centennial Asset Management is a sensitive stock for underweight customers, with portfolio manager Matthew Kidman expecting further corrections in the upcoming August reporting season. Centennial is instead favoring companies facing rising capital expenditures, such as electrical services companies SKS Technologies and Southern Cross Electrical Engineering.
Post Comments: 153
