There are plenty of opportunities on the share market right now. Some top ASX fund managers are using lessons learned during the GFC to help how they invest now.
The AFR has done a piece on what some of the best-performing fund managers during the GFC are doing now during the coronavirus.
Who are those managers? Dion Hershan's Yarra Capital Australian Equity Fund, Anton Tagliaferro's Investors Mutual All Industrials Share Fund, David Pace and Jonathan Koh's Greencape High Conviction Fund and Nick Pashias' Antares Elite Opportunities Fund.
The consensus among the fund managers is that this is a larger, more complex shock than the GFC because of how widespread and sudden the shutdown is.
So what are the opportunities?
The causes of the share market decline is different to the GFC, but the result is the same – lower share prices.
Quality companies with good balance sheets are strong opportunities because they are well placed to ride through this period without needing to do a capital raising.
The general consensus also seems to be that these heavily discounted capital raisings could also be opportunities, just like during the GFC. If the balance sheet is suddenly improved it can improve the value of that business a lot more than just the amount of cash added. The market share price may never go as low as the capital raising price, so it could be a very opportunistic way to buy shares.
Anton Tagliaferro said that he is being careful of banks and the REIT sector. He's looking at those names that are essential for the economy like Brambles Limited (ASX: BXB), Coles Group Limited (ASX: COL) and Aurizon Holdings Ltd (ASX: AZJ).
David Pace from Greencape said that Amcor Limited (ASX: AMC) and Brambles could be opportunities if they can take market share. Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) is another opportunity according to Pace.
Dion Hershan is looking at some of the infrastructure businesses like Sydney Airport Holdings Pty Ltd (ASX: SYD), Atlas Arteria Group (ASX: ALX) and Transurban Group (ASX: TCL). He also thinks that brave investors may find opportunities in the energy sector.
