The recovery in the domestic economy has even resulted in strong returns in the small and mid-cap sectors as rising bond yields ravage growth stocks, typically the bellwethers of the smaller end of the market.
The Big banks and miners have dominated the market gains in the past two months, driven by a rotation in value and rising commodity prices supporting the miners. However, the space for small and medium-sized caps has kept the pace.
The S & P / ASX Small Ordinaries Index is up 2.9 percent since early February, while the S & P / ASX 100 Index is up 2.5 percent.
Recreational trading has resulted in excellent returns for some domestically exposed retailers and travel stocks, and commodity prices from rare earths to nickel have rewarded the rest.
“People look at small caps, see opportunities, and see that the market still has good value,” said Paul Biddle, portfolio manager at Celeste Funds Management.
“Our call during the reporting season was that stocks exposed to domestic activity would do well, and they did. We assume that the domestic level of activity will remain stronger for longer. “
Reporter Will McIness has more to outperform the smaller businesses Here.
