1 00:00:00,000 --> 00:00:02,040 Speaker 1: Now, now, with markets as volatile as they are and 2 00:00:02,080 --> 00:00:04,480 Speaker 1: with the headlines so negative, you'd be forgiven for thinking 3 00:00:04,840 --> 00:00:07,000 Speaker 1: that every company out there has gone down this year. 4 00:00:07,120 --> 00:00:10,120 Speaker 1: Not the case at all. Stephanie Bachelor is from Milford 5 00:00:10,119 --> 00:00:13,399 Speaker 1: Asset Management has deafy here that how are you? I'm 6 00:00:13,480 --> 00:00:15,200 Speaker 1: very well, thank you. Now tell me which parts of 7 00:00:15,200 --> 00:00:17,680 Speaker 1: the share market have been doing well despite the sell off? 8 00:00:19,120 --> 00:00:22,400 Speaker 2: Yes, So if we look across the different sectors that 9 00:00:22,440 --> 00:00:25,279 Speaker 2: make up the global share market, the best performing one 10 00:00:25,280 --> 00:00:29,120 Speaker 2: has been consumer staples. So this sector is up about 11 00:00:29,160 --> 00:00:32,520 Speaker 2: ten percent year to date versus the broader global share 12 00:00:32,520 --> 00:00:35,640 Speaker 2: market being down about five percent, so it's about a 13 00:00:35,680 --> 00:00:39,240 Speaker 2: fifteen percent outperformance. And in other sectors that have held 14 00:00:39,320 --> 00:00:42,880 Speaker 2: up better areas like utilities and infrastructure as well. 15 00:00:43,520 --> 00:00:45,400 Speaker 1: What is a consumer staples company? I mean do I 16 00:00:45,760 --> 00:00:47,080 Speaker 1: do I know any of these companies? 17 00:00:48,280 --> 00:00:51,440 Speaker 2: Yeah? So consumer staples companies are sort of exactly what 18 00:00:51,440 --> 00:00:54,120 Speaker 2: they sound like. You know. They're companies that sell core 19 00:00:54,240 --> 00:00:58,880 Speaker 2: goods that consumers need and can't really live without. Food diverages, 20 00:00:59,080 --> 00:01:03,600 Speaker 2: household products like toilet paper, toothpaste, all companies that provide 21 00:01:03,600 --> 00:01:08,760 Speaker 2: an essential service like supermarkets. So one example is a 22 00:01:08,880 --> 00:01:12,080 Speaker 2: UK consumer health company called HALion, So you might not 23 00:01:12,120 --> 00:01:14,520 Speaker 2: have heard of the company, but I'm pretty sure you'll 24 00:01:14,720 --> 00:01:18,520 Speaker 2: know it's products they sell brands like Panadole, Voltaire and 25 00:01:18,800 --> 00:01:22,040 Speaker 2: Censordine Centrum as well as manymore. 26 00:01:22,120 --> 00:01:24,880 Speaker 1: Yeah, so why are they doing so well during the volatility? 27 00:01:26,280 --> 00:01:28,960 Speaker 2: Yeah, So when there's a lot of uncertainty in markets, 28 00:01:29,080 --> 00:01:33,000 Speaker 2: investors tend to shift towards consumer staples companies because they 29 00:01:33,040 --> 00:01:35,600 Speaker 2: know that they're going to be more resilient during a downturn, 30 00:01:35,640 --> 00:01:38,920 Speaker 2: because you know, they're categories that people can't not buy. 31 00:01:40,080 --> 00:01:43,319 Speaker 2: And then within consumer staples there are subcategories. So one 32 00:01:43,360 --> 00:01:47,240 Speaker 2: of these is consumer health, which HALion falls under, and 33 00:01:47,280 --> 00:01:49,920 Speaker 2: these are even more resilient, So they come in just 34 00:01:50,000 --> 00:01:53,400 Speaker 2: after pet food in terms of sort of macro resiliency. 35 00:01:54,200 --> 00:01:57,040 Speaker 2: So you can think of them like the staple of staples. 36 00:01:57,560 --> 00:02:00,400 Speaker 2: And you know, it's because when we're circle of thinking 37 00:02:00,440 --> 00:02:03,840 Speaker 2: about our health, we become quite loyal to certain brands. 38 00:02:03,840 --> 00:02:05,240 Speaker 2: You know, we want to stick with what we know 39 00:02:05,440 --> 00:02:08,320 Speaker 2: and trust rather than switching it up just to save 40 00:02:08,360 --> 00:02:12,000 Speaker 2: a few dollars. And there's also less competition in the space, 41 00:02:12,080 --> 00:02:15,640 Speaker 2: so in food and beverage, new competitors are popping up 42 00:02:15,680 --> 00:02:18,920 Speaker 2: all the time and snack foods or energy drinks, but 43 00:02:19,280 --> 00:02:22,480 Speaker 2: in consumer health there are a lot of regulatory barriers 44 00:02:22,480 --> 00:02:25,120 Speaker 2: to entry, so it's sort of stopped that from happening. 45 00:02:25,280 --> 00:02:26,920 Speaker 1: And then how are they going to be impacted by 46 00:02:26,919 --> 00:02:27,959 Speaker 1: the tariffs? 47 00:02:29,120 --> 00:02:31,760 Speaker 2: Yeah, so Haleyon is a little bit more protected from 48 00:02:31,800 --> 00:02:35,240 Speaker 2: tariff's relative to other companies. It's a UK company and 49 00:02:35,280 --> 00:02:38,000 Speaker 2: it has about a third of its revenue generated in 50 00:02:38,000 --> 00:02:40,920 Speaker 2: the US, but about eighty percent of those products are 51 00:02:40,919 --> 00:02:44,440 Speaker 2: produced domestically, so they're not subject to tariffs, and then 52 00:02:44,440 --> 00:02:47,880 Speaker 2: the remaining twenty percent are imported. And it also has 53 00:02:48,200 --> 00:02:50,960 Speaker 2: a very high growth margin structure, so that limits the 54 00:02:50,960 --> 00:02:54,360 Speaker 2: impact from tariffs a little bit as well. But there, 55 00:02:54,600 --> 00:02:56,840 Speaker 2: you know, there are other consumer staples companies that aren't 56 00:02:56,880 --> 00:03:02,040 Speaker 2: so lucky. So for example, Remi Quontraro, which sells cognac 57 00:03:02,080 --> 00:03:05,440 Speaker 2: and other spirits from Europe into the US. That's also 58 00:03:05,480 --> 00:03:08,799 Speaker 2: classed as a consumer staples company. But because it imports 59 00:03:08,800 --> 00:03:12,200 Speaker 2: about ninety percent of its US products, it's a it's 60 00:03:12,240 --> 00:03:15,320 Speaker 2: at risk of a big tariff hit, and even more 61 00:03:15,360 --> 00:03:19,720 Speaker 2: so because Trump has threatened outsized tariffs of two hundred 62 00:03:19,760 --> 00:03:23,960 Speaker 2: percent on European alcohol as a retaliation to their tariff 63 00:03:24,040 --> 00:03:27,440 Speaker 2: on US whiskey. So as a result, Remy is actually 64 00:03:27,520 --> 00:03:30,240 Speaker 2: down more than the global shehre market this year. It's 65 00:03:30,280 --> 00:03:34,360 Speaker 2: down fifteen percent, whereas hally On is up nine percent 66 00:03:34,880 --> 00:03:35,720 Speaker 2: in US dollars. 67 00:03:35,840 --> 00:03:37,920 Speaker 1: Yeah, it's really interesting stuff, Steff, thanks for talking through 68 00:03:37,960 --> 00:03:40,720 Speaker 1: to appreciated that Stephanie Bachelor milfairset management. 69 00:03:41,280 --> 00:03:44,440 Speaker 2: For more from Heather Duplessy Allen Drive. Listen live to 70 00:03:44,560 --> 00:03:45,080 Speaker 2: news Talks. 71 00:03:45,080 --> 00:03:48,280 Speaker 1: It'd be from four pm weekdays, or follow the podcast 72 00:03:48,360 --> 00:03:49,400 Speaker 1: on iHeartRadio.