Solid yields offered by ex20 stocks
A growing number of industries and sectors, which are currently under significant change, are creating a challenging environment for many companies, according to listed investment company QV Equities Limited (QVE).
At the same time, the firm said there was an abundance of companies that were often out of favour in the short-term but would represent very good quality and value over the longer term.
QVE, which said it invested in companies that demonstrated “strong competitive advantage, recurring earnings, capable management and the potential to grow their earnings and dividends over time”, found solid yields among ex20 stocks.
Anton Tagliaferro, investment director, Investors Mutual Limited said the QVE portfolio focused on the ex20 segment of the market – excluding the largest 20 stocks by market capitalisation – for a number of reasons. This would include the following points:
- There is more diversity in the ex20 part of the market in terms of industry sectors in the ASX;
- There is much less research conducted on this segment of the market than on top 20 stocks;
- Many ex 20stocks are leaders in their field and are often attractive to larger companies from a takeover point of view; and
- There are often very solid yields on offer among ex20 stocks.
“In terms of our strategy for QVE, we seek to buy good quality stocks when we believe they are trading at a reasonable price, with our focus being on populating the portfolio mainly with well-established industrial companies,” Tagliaferro said.
“We selectively take profits when a share price is nearing full value.
“Many companies held in the QVE portfolio are also utilising other strategies that will boost their growth in the next three to five years with initiatives such as cost-out programmes, new product launches or strategic acquisitions which will enhance the long-term prospects of the company.”
QVE is a listed investment company (LIC) providing access to a diversified portfolio of listed securities which portfolio manager Investors Mutual Limited (IML) believes represent quality and value in the ex20 segment of the market.
AUTHOR
Oksana Patron
Recommended for you
Lazard Asset Management has announced the launch of a new global equity fund, expanding its qualitative offering for Australian investors.
After introducing its first active ETF to the Australian market earlier this year, BlackRock is now preparing to launch its first actively managed, income-focused ETF by the end of November.
Milford Australia has welcomed two new funds to market, driven by advisers’ need for more liquid, transparent credit solutions that meet their strong appetite for fixed income solutions.
Perennial Partners has entered into a binding agreement to take a 50 per cent stake in Balmoral Investors and appoint it as the manager of Perennial's microcap strategy.
