Balanced Portfolio Strategy Update
Date: 26/6/2024
*** GENERAL AVICE ONLY***
Fortescue (FMG), established in 2003 and based in Western Australia, has rapidly grown into a global mining leader, shipping over 2 billion tonnes of iron ore since 2008. Renowned for its world-class infrastructure in the Pilbara and commitment to innovation, Fortescue remains one of the world’s lowest-cost iron ore producers. Under the leadership of Dr. Andrew Forrest AO, the company is ambitiously transitioning towards green energy, aiming for real zero Scope 1 and 2 emissions by 2030 and net zero Scope 3 emissions by 2040. Fortescue’s core values emphasize agility, continuous improvement, and pioneering sustainable solutions in the mining industry.
*** Trade Plan ***
We have held our BHYB hybrid bonds for approximately one year and have successfully achieved the anticipated yield. Given the current market conditions, we see a strategic opportunity to optimize our portfolio by reallocating a portion of our holdings.
Fortescue Metals Group (FMG) is currently undervalued, with a yield of around 9%, significantly higher than typical returns in the current market. The recent sell-off in FMG’s stock price has presented a favorable entry point, making it an attractive investment opportunity.
By switching 5% of our BHYB holdings into FMG, we aim to capitalize on the potential price recovery and yield advantage offered by FMG. This move is expected to enhance our portfolio’s overall yield while leveraging FMG’s strong fundamentals and growth prospects.
We are recommending selling BHYB and buying Fortescue (FMG)
Banking Hybrid ETF (BHYB)
Current Portfolio Allocation: 18%
Sell 5%
New Portfolio Allocation: 13%
Fortescue (FMG)
No current Portfolio Allocation
Buy 5%
New Portfolio Allocation: 5%
Entry: $21.6 | Target: $30 | Stop Loss: $ 17.5 | Trailing Stop: 15%
Disclaimer: The recommendation given is general advice only. It does not take into account your personal objectives, financial situation, or specific needs. This information should not be your sole resource when making such decisions. We strongly recommend you to seek the advice of financial, taxation, and legal professionals before finalising any investment decisions.