Sage Capital: What do rising interest rates and inflation mean for Australian equities?

Coping with volatility is normal for investors, especially with the current challenges of persistent inflation, rising interest rates and the global impact from Russia’s decision to invade Ukraine influencing today’s markets. With no shortage of uncertainty to worry investors we believe it is critical to be well-diversified. As style and cycle neutral investors, we evaluate investments using proprietary Sage Groups − grouping companies by how they tend to perform in different market conditions to help control macroeconomic risks to produce a portfolio that has the potential to perform well, no matter where we are in the market cycle.

Sage Capital Chief Investment Officer, Sean Fenton and Portfolio Manager, James Delaney discuss how the current market backdrop is impacting Australian equities, including the sectors well positioned for the year ahead.

Topics covered

• The Russian-Ukraine conflict and the impact on commodity prices and inflation
• Rising interest rates and the impact on style, sectors and valuations
• The implications of higher inflation with respect to economic growth, consumer confidence and wages
• Portfolio positioning and performance for CC Sage Capital Absolute Return Fund (market neutral) and CC Sage Capital Equity Plus Fund (150/50 active extension) and the outlook for 2022