The bulls are back in charge, growth assets are marching higher, and many investors will look at their portfolios with a sense of relief or even a smile. A quick glance at the 1-year performance numbers for both Australian and Global fund managers confirms what we all know - growth is back in vogue.
Data supports the weight of cash moving back into equities, with the latest Bank of America Fund Manager survey revealing cash levels have dropped to the lowest level since the heady times of 2021.
The forward PE multiple on the ASX for the most expensive stocks is currently 47 times. For context, that is higher than the peak in 2000 preceding the dot-com crash and is not too far off the peak of 56.3 times in 2021, which was powered by the stimulus-fueled COVID rally.
These peaks were followed by savage drawdowns in high-growth equities and the funds invested in them. The scars of 2022 still linger, with 3-year numbers on many growth managers lagging in the low to mid-single digits.
So, if you're like me and you are looking at your portfolio wondering if the good times will roll on as well as how you might consolidate on them before they all turn to custard, then it might be worth considering the views of Dr Philipp Hofflin, Portfolio Manager/Analyst at Lazard Asset Management.
Time codes
0:00 - Introduction
0:34 - Investing against a backdrop of low growth and falling interest rates
6:17 - Where is the value looking to 2025
11:45 - Concentration on the ASX
14:36 - Allocating across Banks and Resources
17:25 - Opportunities outside the ASX20
19:38 - Will China’s stimulus work?
21:52 - RIO’s lithium play - no value added
