Attractive equities despite dismal forecasts: Talaria
Although an unfavourable outlook for 2023 continues to dampen investor confidence, Talaria Asset Management reveals the types of equities to look out for.
Hugh Selby-Smith, co-chief investment officer at Talaria, recommended for equity investors to prioritise income, good value, short duration and rapid payback periods when eyeing out investment returns.
“That means looking towards large-cap healthcare, especially pharma majors, for attractive options,” he explained.
“In terms of regions, Japan and the UK offer value. From a thematic point of view, capex growth and onshoring are likely to have positive long-term benefits for countries like Mexico and industries like industrial automation.”
In the US, the CIO identified that share prices remained expensive but had the potential to fall again.
Selby-Smith said: “This is against a backdrop of unusually rapid interest rate increases in developed markets, falling leading economic indicators such as housing sentiment, and sticky inflation components squeezing near record levels of profitability.”
Despite his observations, he recognised that individual stocks could perform differently and would give investors the opportunity to diversify their portfolios.
“US shares are expensive, pricing in a ‘soft’ or even ‘no landing’. Compared with 2007, many of the forward EV/sales bands of the global index are so high as to be pricing in a good outcome. Usually when this is the case, upside is scarce and risk abundant.”
AUTHOR
Jasmine Siljic
Recommended for you
Clime Investment Management is overhauling the selection process for its APLs, with managing director Michael Baragwanath describing the threat of a product failure affecting clients as “pure nightmare fuel”.
Global X will expand its ETF range of exchange-traded funds next month with a low-cost Australian equity product as it chases ambitions of becoming a top issuer of ETFs in Australia.
Flows into Australasian sustainable funds have moved back into outflow territory in the second quarter of 2025 driven by US$400 million in redemptions from passive funds.
Flows into SPDR ETFs during the second quarter of 2025 have helped State Street to reach US$5 trillion in assets under management.
