September 2024 Quarter in Review

The market posted its best September quarter  in more than a decade driven by growing certainty around interest rates, Chinese economic stimulus and US interest rate cut. A combination of these events saw the Australian ASX200 market return to growth increasing 6.46% closing at 8,270 for the quarter. A remarkable result considering the period also included the largest market fall since the global pandemic on the back of US recession fears.

State of Australia

The Australian economy continued recent trends in the September Quarter. The Reserve Bank of Australia kept rates on hold at 4.35% and continues to delay any rate cuts until the inflation target of 2-3% is achieved. Inflation continued to ease albeit slowly recording an annual rate of 3.5%. The unemployment rate remained unchanged at 4.2% through a combination of strong job growth and equally strong participation rate. In business the weak consumer outlook continues to drag on revenues as consumers restrict spending.

Limberg Asset Management Portfolio Positioning

Over the September quarter we took the opportunity to make several adjustments to the portfolio investment strategy to take advantage of prices and opportunities.

We selectively made the following changes:

• Adding a 2.5% allocation to BHP into the portfolio. BHP showed some price weakness early in the quarter  and has since been a beneficiary of the Chinese economic stimulus. BHP pays an attractive dividend yield and is fully franked.

• We participated in a new IPO from Metrics Credit Partners in a new product they have brought to the ASX. Metrics Real Estate Multi-Strategy fund (ASX:MRE) is a combination of a real estate wholesale fund that Metrics have been running for 5 years successfully and 9 large property development projects. The funds targets returns of 10-12% p.a. with 8% being paid as monthly income payments with the first paid in November.

• We took the opportunity were appropriate to add more MA Financial (MAF) into the portfolio in August and the price has rallied since then.

• Macquarie Bank (MQG), MA Financial (MAF) and BHP all rallied providing positive contribution to portfolios and they all paid a dividend recently.

The portfolios are well positioned with cash building with the view to look at new opportunities. The unlisted and fixed income assets continue to provide attractive income paid monthly and the growth assets have added additional performance and provided dividend income over the quarter.