FirstWrap commentary – 31^st March 2024

The March quarter saw the ASX200 close 306 points higher at 7,897 points, a 4% increase, extending the market run since November 2023. The Reserve Bank (RBA) held rates at 4.35% stating inflation control is the highest priority. While inflation is slowly returning to target range, between 2-3%, at current policy settings, the economic outlook remains highly uncertain with the RBA reiterating their determination to return inflation to target.

The continued market rally benefited Macquarie Bank (MQG), Sol Pattinson (SOL) and BHP Group (BHP). MA Financial Group reported first half of FY24 numbers and corporate advisory part of the business had been weaker than the previous year while credit fund inflows are at record highs. This caused some volatility in the share price which is slowly recovering towards the end of the quarter.

Actions taken through the quarter:

Many of the listed credit and income funds came to the market to raise capital. All of these rights issues and capital raisings were done at a discount to the current trading price and the continue to provide attractive monthly income. We participated in all of these where client’s weightings allowed.

• Metric Income Trust (MXT) did a share purchase plan in early January.
• Gryphon Capital Income Trust (GCI) had a share entitlement mid-February.
• Metric Income Opportunities Trust (MOT) provided a share purchase plan with shares being issued on 4^th April.
• Investments in Metric Direct Income fund, MA Priority Income fund, GCI, MOT and MXT continued to pay monthly income with yield ranging from 8% to 11% p.a.
• We selectively bought a position in BHP Group (BHP) during the quarter and will continue to buy at lower prices for client’s super funds.
• MA Financial Group (MAF) and BHP Group (BHP) paid their semi-annual dividend during the quarter.
• Clients with term deposits had these mature late March or will mature in early April. The cash will be held for opportunities for the coming quarters or reinvested back into term deposits.

The cash from income, dividends, interest and employer super contributions will continue to build in the FirstWrap cash account which will  be allocated as opportunity present in the coming quarters.