Here we are again, talking about the “great rotation” from banks into resources — and, more specifically, from Commonwealth Bank into BHP.
Last week saw a significant sell-off in CBA, down more than 4%, and a rise in BHP by 8%. It also marked the most significant narrowing of the gap between the banks and resources indices since mid-May.
The Financial Review reported that Australia’s biggest super fund, AustralianSuper, was three months into the trade, with chief investment officer Mark Delaney telling the paper, “We’ve rotated back into resources, which might be too early, but … that’s sort of what you want to do".
Buying from super funds has been a major driver of the fundamental-defying run in the banks and CBA, with funds now owning nearly a third of the sector. As we have been reporting, they have effectively hit their ceilings on holdings.
