Australia looks to be a safe harbour for investors next year despite the rough waters caused by global political tensions and policy challenges, according to T. Rowe Price.
Head of Australian equities, Randal Jenneke, said he was optimistic about Aussie equities, but was cautious of a few risks like falling house prices and geopolitics.
Jenneke, speaking about the US and China trade war in particular, said supply chains and business models that thrived during globalisation would now face disruption with increased trade tariffs – something that would have a direct consequence on global GDP growth, earnings and inflation.
“This global pressure may impact Australia’s ability to manage its housing downturn, which is at least one year into a three year cycle policies,” he said. “In addition, with interest rates at very low levels, the Reserve Bank of Australia has a limited arsenal to stimulate growth and spending.”
Despite this, Jenneke believes Australia’s high dividend paying marketplace would likely weather the imminent volatility but cautioned investors not to get caught up in short-term noise, noting that understanding the fundamentals of companies was the key to finding growth.
While past performance is no indicator of future performance, Money Management used FE Analytics to take its bets on what might continue to rally through 2019 based on consistent top-quartile performance over a three, five and one year period.
Some consistent top-dwellers are DDH Selector Australian Equities, which has produced consistent top quartile results across a one, three and five-year time period, and even a ten-year time period.
Sitting a close second is the Bennelong Australian Equities Fund, which has also sat in the top quartile with returns of 10.22 per cent across one year, 11.57 per cent across three years, and 12.45 per cent across the five years to date.
Ganes Focused Value and Macquarie Australian Shares have similarly consistently outperformed and produced top-quartile results. The chart below tracks the performance of the funds as compared to the S&P ASX 200.
