Which sectors led FY20/21?
As we head into a new financial year, financials were the best-performing sector of last year closely followed by consumer discretionary.
According to Wealth Within, the financials sector rose 19.6% over the year while consumer discretionary rose by 19.3%.
Utilities was the worst-performing sector with losses of 8.3% while technology, traditionally a high-performing sector, was down 0.8% after seeing a sell-off towards the end of 2020.
Dale Gillham, chief analyst at Wealth Within, said: “It is reasonable to assume that the financials and consumer discretionary sectors may slow down over the rest of this calendar year while opportunities are likely to come from utilities, information technology and energy. Of these, I like the energy sector the best although I also believe opportunities will also come from the industrial sector.
“Looking at the stock level, the a2 Milk Company is down 46% per cent this financial year although it is showing good signs of having turned a corner while AGL Energy and Beach Energy were both down over 30% for the financial year. While I believe it is a bit too early for both of these companies, I would certainly put them on my watch list.”
Forecasting for the next 12 months, Gillham said he was still of the mindset that the ASX could experience falls of up to 12%.
“While it is possible the Australian stock market could trade higher, I expect the fall to be orderly and in the vicinity of 8% to 12%. That said, given that the market has been displaying a mind of its own, I recommend investors put stop losses on all of their stocks in the event the fall is more severe.”
AUTHOR
Laura Dew
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