In terms of our own portfolio, we are not rushing anything and certainly not chasing the market. In fact, the equity market sell-off has provided us significant opportunity to access high quality infrastructure assets at attractive valuations – in line with our philosophy of always looking to own quality businesses at the right price.
We are also:
- updating our macro outlook for both coronavirus and lower commodity prices – we are expecting at least a couple of quarters of global economic weakness
- continuing to stress test models for the global economic impact of the coronavirus as well as regional quarantines and the fall in commodity prices (modelling worst case scenarios)
- prioritising quality names with strong management teams and strong balance sheets
- looking for earnings resilience in an uncertain economic environment – utilities are now offering attractive value (historically have been over-priced), are immune to economic shifts and benefit from lower interest rates and lower commodity prices
- considering stimulus and how that will impact global growth outlooks, and
- considering stocks that have been significantly over-sold – while they may be subject to near-term volatility, the valuation is just too cheap to pass up.
More detail, including current high quality investment opportunities presented to us, can be found in our February monthly report.