It’s been a turbulent year so far for ASX 200 shares.
The benchmark S&P/ASX 200 (ASX: XJO) is down only 6%, but that masks plenty of carnage in the underlying index.
For example, the technology sector is down an average of 24%.
Conversely, commodities and financials have rallied on inflation and interest rate fears.
In times of uncertainty, I turn to the experts.
Here’s how 4 ASX fund managers are weathering the storm.
Keep calm
In times of uncertainty, emotions can take hold and investors deviate from strategies.
Thoughts like “I should be selling now” or “maybe I wait on the sidelines” begin to enter.
But in times of ASX 200 volatility, more so than ever it’s important to keep a clear head and stick to your plan.
This is best summarised Fairlight Asset Management’s latest update:
“Few investors have been able to time markets successfully with the most damage incurred due to capitulation within the most challenged periods”
Bumpy road ahead for Mr Unprofitable
Unprofitable ASX shares have been the hardest hit.
Chief Investment Officer Mark Devcich at Pie Funds summarised why:
“There now seems to be a focus on companies seeking profitability rather than growth at all costs. However, it is often difficult for a company to make this transition as they have built their infrastructure around growing as fast as possible and are not optimised for profitability”
With the market less inclined to back capital hungry ASX 200 shares, expect a bumpy road ahead for Mr Unprofitable.
ASX 200: Cyclicals or growth?
The Copper price is currently at a standstill. Oil and coal prices are mooning. And banks are set to benefit from rising rates.
So we should be buying ASX 200 cyclicals right?
QVG Capital weighed in on the debate, arguing that growing companies with pricing power is the way to go:
“We are sceptical of the view the best way to navigate inflationary times is by owning lowly-rated, low-growth companies without pricing power; we think the opposite is true”
Time to buy
The team at Ophir Asset Management believe the market is being driven by ‘top-down factors’ instead of underlying business fundamentals.
Subsequently, this has created decent buying opportunities for ASX shares:
“The good news is there are some very attractive opportunities now on offer in the market that we haven’t seen at these prices for several years”
The update goes on to say that there could be further downside if markets overcorrect. But valuations are now back at longer-term averages.
