March 2026 Quarter - Video update

Markets have been volatile and eventful since the beginning of 2026. During March, headlines associated with the conflict in the Middle East dominated global equity markets delivering a sell-off for global equities as investors lowered risk and allocated capital to defensive exposures. However, markets have subsequently rallied following the announcement of a ceasefire and the start of peace negotiations between the US and Iran. 

The outlook for the Australian equity market is less “bullish” than it was six months ago. During that period, interest rates have risen three times. The move higher is in response to rising inflation which risks being exacerbated by the increased energy costs associated with the conflict in the Middle East.  Higher rates are expected to slow household spending and consumer demand within the Australia economy and corporate earnings risk disappointing investor expectations.

As a result, the portfolio has a more defensive structure than compared to six months ago. Exposure to interest rate sensitive (property trusts, debt providers & banks) and consumer discretionary (retail) sectors have been lowered and companies with lower-risk capex exposed earnings growth (mining services, engineering contractors and data centres) have been prioritised.

Notwithstanding the more challenging macroeconomic back drop, below are several key fundamental valuation drivers that we believe support equity market performance and stock selection positioning within the portfolio.

Data centre construction, defence industry and Brisbane olympics/infrastructure investment growth are sectors that are expected to make a strong contribution to the portfolio’s performance over the next 12-24 months. 

Our quarterly video below provides investors with additional detail regarding our equity positioning and a number of stock specific ideas.