Although many resource names have enjoyed a strong rally over the past 12 months, there’s reason to be cautious.
To protect capital we recommend investors holding resource names, run tight stop-losses below the recent lows.
Overall, investors should be reviewing their portfolio allocations, tilting to defensive names and ensuring access to effective portfolio hedging and shorting strategies are in place.
S&P ASX Index Rebalance – March Quarter
There were two changes in the ASX50 with Aristocrat (ALL) and Fortescue Metals (FMG) added and Coca Cola (CCL) and Seek (SEK) removed.
Macquarie Atlas (MQA) & Evolution Mining (EVN) added to the ASX100 with Sirtex (SRX) and Blackmores (BKL) removed.
There were no changes in the ASX200.
Washington H Soul Pattinson (SOL) added to the ASX300.
FMG.ASX has rallied from $1.50 to $4.50 in the past 6 months. June Quarter shipments were strong and the company continues with further cost reduction. US$600m reduction in net debt and positive FY17 guidance of 170 Mt.
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