11 January 2021
This report has been prepared by Northcape Capital, the underlying investment manager for the Warakirri Ethical Australian Equities and Warakirri Concentrated Australian Equities Funds.
Australian shares surged 13% over the December quarter as the prospect of a vaccine rollout increased confidence in the sustainability of the current V- shaped economic recovery.
Changes in key variables over the quarter included:
The impact of these key variables led to an extension of the market rotation towards value / cyclical stocks.
We are somewhat cautious on market outlook in the near term as equities have already advanced strongly in the last quarter while investor sentiment has turned universally bullish. This leaves no room for error.