Thematic investing is a forward-looking approach that seeks to capitalise on megatrends. In the Focus Portfolio, we are exposed to a few thematics, including the Energy Transition. In this report, we delve into the investment opportunities in the transition to renewable energy.

The Focus Portfolio is switching channels from News Corp (NWS) to Nine Entertainment (NEC). Both NWS and NEC are media stocks and we think this is a like-for-like switch in terms of portfolio characteristics. Here, we explain why we have a preference towards NEC.

Reporting season has generally seen results that have beaten expectations. Overall, FY22 earnings have demonstrated the resilience of corporate Australia as margin pressures intensified into June. However, there remains a high level of uncertainty for FY23 as margin pressures continue to build. We still believe earnings growth could soften further over the next 6 months.In this report, we break down why FY22 results have not deterred FY23 caution.

In the course of this reporting season, we have yet to witness any major reporting disasters, and the data have been relatively encouraging overall. As we discuss in this week’s report, we believe that this paints a positive picture of Australian earnings' resilience in FY22.

Since the beginning of the year, the Focus List has been underweight iron ore miners. We continue to believe the fundamentals for iron ore (and the miners that produce it) are skewed to the downside over the medium-term. In this report, we look at factors impacting iron ore supply and demand, and discuss our investment strategy in this area.

The Australian equity market finally caught a break in July, with a strong 5.9% increase in the ASX 300. This marked the best July since 2016. The combination of easing interest rate pressures and a decent US earnings season helped fuel a US-led global equity rally, and the Australian market caught onto this wave of optimism.

We look back at factors affecting the market and explain the changes we’ve made to the Focus List in August as a result.

The Australian share market could be in for a mixed reporting season with respectable results tempered by cautious outlook statements, as threats to corporate profits accumulate at home and abroad. We believe that Australian equities are more than likely entering an earnings downgrade cycle, and the reporting season this month may be one of the key catalysts to kick off further downward revisions led by risks relating to margin degradation. Here we detail what factors affect our outlook.

In recent months, we have argued a shift towards quality defensives has merit. As we move into the mid to late stages of the cycle, we prefer companies with resilient earnings profiles that are relatively insulated from the macro backdrop. In our latest Focus List update, we upweighted our exposure to quality defensives, which included increasing our position in leading telco company Telstra (TLS).