The downward spiral of the Australian Banks
Invast has been negative to slightly neutral on the Australian banks over the past two years. We changed our view to an outright negative over the past few weeks – confirmed by ANZ and CBA’s large capital raisings. Our analysis though doesn’t just stop at the individual stock level. One of the important things to note is that the Value Australia strategy on our PortfolioSelect platform is around 40% exposed to financial stocks, of which the downward movement in the Australian banks will have a negative impact.
If you’re holding this strategy, it might be time to switch.
The good news is that the Value Australia strategy has delivered just under 9% return over the past year, so investors who have had exposure to this are more than better placed than those who just purchased the ASX200 index. The broader market is down over the past year, yet this strategy is well and truly delivering a positive return. But that could change and we want to get on the front foot. Invast’s PortfolioSelect platform is attractive in that it offers diversification but investors need to ensure that they aren’t over exposed to certain overlapping baskets of diversification.
The downward spiral in the Australian banks will cause headaches in the coming years. There are plenty of other well diversified, international and attractive strategies which we comment on twice every single week. Remember, prevention is better than cure and locking in some healthy gains thanks to banking exposure is not a bad strategy at all.
To find our more above Invast’s PortfolioSelect platform – and strategies like Value Australia– click here.
Invast Investment Committee
These are our initial impressions only, please make sure you always read all disclaimers on this website and individual reports very carefully. The Invast team of advisors are happy to answer any questions you may have, so give us a call today on 1800 468 278 or email firstname.lastname@example.org. Alternatively, use our live chat facility on invast.com.au.
*Past performance is not indicative of future performance. The calculation of the returns is based on the performance of the actual underlying securities, in accordance with the weighting envisaged by the portfolio. These performances exclude financing and commission costs.
The Invast PortfolioSelect platform offers a collection of Strategic Investment Portfolios (SIPs). SIPs are professionally researched and constructed portfolios of CFDs over underlying stocks and ETFs, which reflect popular market themes or strategies. You can buy SIPs across local and international stock exchanges in one click.
Value and low volatility stocks exploit two strategies that typically deliver more attractive risk-adjusted returns compared to the market. This portfolio will be executed as a CFD.
Australia’s ageing population will benefit many companies from a range of sectors as their business grows in line with increased numbers of older customers. This portfolio will be executed as a CFD.