The factors to look for in defensives
There are two stocks in the healthcare and infrastructure space which can help investors gain defensiveness in their portfolio, according to T.Rowe Price.
The companies that would be best able to manage through this period will likely be companies with strong pricing power, differentiated products, good industry structure and defensive volumes.
This included Resmed in the healthcare space and Transurban in the infrastructure sector.
Randal Jenneke, head of Australian equities at T. Rowe Price, said: “Resmed for example has a large underpenetrated market, and despite various input and logistics cost pressures, has been able to pass through price increases given their dominant market share and current lack of reputable competition.
“In infrastructure, Transurban for example has built-in price increases for its contracts. The nature of its cost structure brings high EBIT margins and margin stability. Anecdotally, you know the cost of tolls are rising when every second taxi driver makes a point or two about it.”
Shares in Resmed were down 14.5% since the start of the year and 5% over one year to 30 June while Transurban was up 4% since the start of the year and 0.4% over one year.
Recommended for you
Clime Investment Management has faced shareholder backlash around “unsatisfactory” financial results and is enacting cost reductions to return the business to profitability by Q1 2025.
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.