SUMMARY
The Pengana Australian Equities Fund enjoyed a strong start to the new financial year, generating a +6.4% return in July. By way of comparison, the (annual) return of the RBA cash rate plus 6% equated to approximately +0.5% for the month, whilst the Australian stock market grew by 6.3%.
Despite the strong equity market momentum, we continue to see reasons for caution. The risks that we have been discussing for some time now – rising inflation, rising interest rates globally, the withdrawal of stimulus and money supply, geopolitical tensions in Europe and more recently, resurfacing questions of systemic risk in China – continue to present a difficult environment for protecting capital and making money.
We are also about to enter the reporting season for most companies’ fiscal 2022 year results, a period where we will be looking to test and validate our investment thesis for each of our holdings.