Fund Manager Radar: Know when to walk away, and know when to run...

Research evidence excerpt

Fund Manager Radar: Know when to walk away, and know when to run...

J P M O R G A N Asia Pacific Equity Research

25 June 2026

Fund Manager Radar

Know when to walk away, and know when to run...

• Defensives: Know when to walk away – After a long stretch as the the most Australia

favoured segment, managers are retreating from the defensive complex.

Australia Equity Strategy

Aggregating the active flows across Communications, Staples and Healthcare,

the average manager stripped out roughly 59bp of combined defensive active Jason Steed AC

weight in May. The move was broad rather than idiosyncratic: (61-2) 9003-8609

jason.h.steed@jpmorgan.com

Communications led the retreat (-30bp), with Healthcare (-11bp) and Staples

Roisin Kiernan

(-13bp) following in lockstep. Notably, nearly 70% of the managers we track (61-2) 9003-6670

scaled back their Communications and Healthcare positions. The key question roisin.kiernan@jpmorgan.com

is whether this is the opening salvo of a sustained exit from defensives, or a J.P. Morgan Securities Australia Limited

tactical trimming. In our view, there is increasing evidence that it’s the former.

• Communications: The sound of silence - Communications shed 20bp of Performance of Love Index movers index weight through the month, and managers mostly followed lower, with the

majority of the cohort cutting their holdings. This looks like a deliberate scaling STOCK May-26 REL 3M REL

back in the sector: stripping out the benchmark move, c.70% of managers cut POSITIVE MOVERS

their active weight, confirming a genuine retreat rather than a mechanical CBA -5.7% -5.4%

rebalance. Importantly, the move isn’t sector-specific but part of a wider theme GMG 6.3% 23.1%

of defensive down-weighting as managers rotate into cyclicals and resources. IAG 1.2% 0.6%