The dominance of mining stocks, and chiefly BHP Group, on the Australian sharemarket has helped it smash the SP 500 by its biggest margin in more than three years over the first quarter, as commodity prices return to supercycle levels.
“It’s been an incredible performance this quarter, and we’re still in a pretty good growth outlook,” said Jun Bei Liu, lead portfolio manager at Tribeca Investment Partners. The march higher in inflation has created a rush to equities, where a tactical allocation can protect investors from soaring consumer and producer prices.“Commodities are seen traditionally as a bit of an inflation hedge and commodity prices are certainly doing their part right now,” said Lachlan Shaw, co-head of mining research at UBS.
“Higher prices for longer means higher earnings and higher cashflows, and for most of these names, a step-up again in returns and dividends,” said Mr Shaw. In particular, the broker expects the price of iron ore to average $US135 a tonne for 2022, up from its previous forecast of $US110 a tonne. It’s expected to average $US105 a tonne in 2023.
Lol not going to last shorting the ASX until 7420