It's a short week with the Australia Day holiday tomorrow but we're here making sure you – and your investment portfolio – don't miss anything. In today's edition we continue to develop our coverage of investing in overseas markets as Mitchell Sneddon takes a thorough look at what's on offer among internationally-focussed ASX-listed LICs. Later in the week, Kirstie Spicer will expand her coverage on the best international fund managers as she puts BT European Share Fund under the spotlight – if you missed Kirstie's examination of the IFP Global Franchise fund last week you can read it here: IFP Global Franchise Fund.
Speaking of LICs – which have bolstered their reputation with a solid performance over the last few volatile weeks – on Thursday (January 28) at 12.30pm Kirstie Spicer and Mitchell Sneddon will be hosting a special webcast titled 'What to look for in a LIC?'...it's our first webcast panel of the year so don't miss it.
And if you've got the diary out you might make a date for our results preview webcast which is set in for Thursday February 4 at 12.30pm: I'll be hosting and we'll cover the outlook for the annual reporting season which begins very soon. What's more, we'll be looking specifically at the results expected for the stocks in our model portfolios...more details next Monday!
LIC model portfolio
No changes to the LIC model portfolio this week. I have been tempted to add the remaining cash in the portfolio to Magellan Flagship Fund (MFF). Those following the fortunes of Chris Mackay's international LIC would have seen it fall from as high as $2.18 down to where it is now. It was over priced at $2.18 and then fell to be undervalued. The share price now sits in line with the NTA when you take into consideration the dilution of the options, which expire in 2017.
If you take the time to read Mackay's December Monthly NTA announcement you will his cool head remains. The MFF team continues to monitor for better growth prospects but hold steady for now. MFF is a story about holding quality businesses through a downturn. If the share price drops to the low $1.80s again I will happily add to this position.
If you missed our conversations with NASO Asset Management CIO Sebastian Evans and BKI Investment Company MD Tom Millner make sure you check our video library (BKI is now available and NAOS will be later this week) to catch up on Eureka Interactives.
- Mitchell Sneddon
Growth portfolio update
The growth portfolio has had a mixed performance of late. Capitol Health has continued to struggle with poor market sentiment and regulatory uncertainty. We change our recommendation to a hold on CAJ, as the price has been heavily sold. More on CAJ can be read here: Capitol Health – Let’s see.
Additionally, Empired (EPD) has also been sold down heavily as the company announced that some contract delays and one off costs were incurred, and that the first half result would be impacted. We expect to have a reviewed positon on EPD in next week’s Eureka Report.
Despite these short-term setbacks, the portfolio is continuing to perform to our expectations.
Income portfolio update
The income first portfolio has outperformed in recent weeks as falling markets have been mitigated by a strong cash holding and some defensive stock exposures. Leading into reporting season, we expect the portfolio to be well placed to benefit from dividend announcements as well as earnings results.
This week, no changes have been made to the portfolio holdings, but we note that the weakness in markets will undoubtedly provide some yield based buying opportunities during the upcoming reporting season.
For now, and in the context of a generally weak market, we remain comfortable that the portfolio is well placed to achieve its objectives.
- James Samson