International equity exposure remains essential

Over the past few weeks, Clime has presented its rationale for local investors to maintain portfolio exposure in major international companies. It is our view that equity markets will remain volatile, and indeed this has been a feature of markets in recent days leading up to following the Brexit vote in the UK. In managing our international portfolio, we believe the focus should remain with US multinationals that have strong brand names, business “moats”, robust balance sheets and potential to sell into high growth emerging markets. Price volatility creates attractive trading opportunities in some large and highly liquid companies. Often we see steady earnings performance and outlooks that belie short term price volatility. Rather than simply observe volatility, it is better to exploit it. One US multinational with strong growth prospects is PayPal (PYPL.OQ). (VIEW LINK)