Co-founder and CEO Jason Todd of Ten Cap suggests that the pausing of US tariffs in April marked a peak in uncertainty, ushering in a period of stability and growth for equities. Todd remains optimistic about the market's trajectory, advocating for a long-term investment strategy as equity markets demonstrate a strong capacity to endure and absorb potential risks. He predicts that the markets will continue to climb, albeit gradually, throughout the remainder of 2025, setting a solid foundation for future gains.
Co-founder and Lead Portfolio Manager Jun Bei Lui anticipates a strong performance by the Australian equities sector for the rest of the year. Highlighting earnings growth and expansion of earnings multiples as key drivers, Bei Lui expects small and mid-cap companies to outshine their larger counterparts in this environment. The domestic market's responsiveness to policy rate cuts, particularly in consumer and interest rate-sensitive sectors, is cited as a pivotal factor enhancing investor confidence.
Strategies focusing on companies like JB Hi-Fi, REA Group, Seek, and Universal Store align with Ten Cap's belief in bottoming out earnings environments and advancing valuation processes. As the Reserve Bank of Australia edges towards a likely rate cut, these companies are positioned to benefit from renewed consumer confidence and favourable operational leverage dynamics.
The nuanced strategy adopted by Ten Cap includes participating in IPOs and identifying early-stage promising ventures, as evidenced by investments in companies like Virgin and GemLife. Such moves are aimed at capitalizing on opportunities stemming from organisational restructuring and demographic trends, further solidifying Australia's appeal amid US uncertainties.
