Why do we have exposure to some sectors that may seem counterintuitive, like Travel?

We try to pick the best quality companies, at the best value (price). However, while the global economy became progressively worse from March 2020, global stock markets experienced a strong rally, not supported by economic fundamentals (including corporate earnings), making it increasingly difficult to find stocks that are good “value”. So, we look at value relative to the market and a stock’s peers within their respective sector.

As a result, we may own stocks in sectors that seem like they have poor outlooks and this may be for a number of reasons. It may be because we believe the sector’s situation will improve as the COVID situation does, or because the company has streamlined itself and will become more profitable as things turn around, or because it contributes to risk management of the portfolio.

In our Performance Reports, we detail the new information since November 2020 which has resulted in us reassessing our view towards markets, from being defensive to cautiously optimistic. This information includes the result of the US Election, COVID vaccines, strength in the Australian Economy, Global Demand as a result of extremely high household savings and the profit potential from streamlined companies.

When you are a client of ours, you can see a detailed holding-by-holding breakdown of your portfolio. Clicking on the security name provides a report which explains the reason that holding is included in the portfolio.

We have many screens available to filter out exposures if you have a particular view and want to omit certain risks from your portfolio. If there is a particular position that is not excluded by existing filters, please email Contact@NucleusWealth.com or call 1300 623 863 to talk to us about your request.