What Worked Australia - 31 Mar 2017 - Value and Beta works, while Momentum down yet again

What Worked

Value, namely Trailing PER and Dividend Yield, swung back into positive territory this week, although not with quite the same ferocity of the back and forth swings of the last month. The move in value was in large part driven by the more expensive names in the market coming off, although the cheaper names also managed to just outperform the benchmark. Names with bottom of the market forward dividend yields that came off this week included Galaxy Resources (GXY, -10.0%), Bellamy’s Australia (BAL, -9.1%) and Resolute Mining (RSG, -3.7%). The other side of this trade, the names in the market with higher forecast Dividend Yields, saw names such as Genworth Mortgage Insurance (GMA, +7.1%), Alumina Limited (AWC, +1.4%) and Seven West Media (SWM, +9.7%) all seeing good returns for the week.

While 12-month momentum was off yet again, this was in large part driven by a sell-off in the better performing names over the last 12 months, while the underperformers got a bit of a reprieve and came through largely in line with the market. OZ Minerals (OZL, -5.0%), Australian Agricultural Company (AAC, -0.3%) and Viva Energy REIT (VVR, -1.2%) were among those best performers over the last 12 months most impacted.

Who Moved

Names moving on significantly higher than normal volumes dropped this week, with only 14 names from the benchmark generating higher than normal volumes. On the positive side, Myer Holdings (MYR, +14.8%), Brickworks (BKW, +3.8%) and Bank Of Queensland (BOQ, +5.7%) all outperformed this week back by volume, while G8 Education (GEM, -2.2%), Trade Me Group (TME, -1.3%) and Nufarm Limited (NUF, -0.7%) all; finished the week lower and well off the benchmark.


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