Model Portfolio – The Seat Belt Sign Is on

Research evidence excerpt

Model Portfolio – The Seat Belt Sign Is on

Idea

July 8, 2026 09:37 PM GMT

Morgan Stanley Australia Limited+MAustralia Macro+ Matters | Asia Pacific Chris Nicol

Equity Strategist

Model Portfolio – The Seat Belt Chris.Nicol@morganstanley.comChris Read +61 3 9256-8909

Equity Strategist and Australia Economist

Chris.Read@morganstanley.com +61 2 9770-1513

Sign Is on Antony Conte

Antony.Conte@morganstanley.com +61 2 9770-1544

Fiscal reforms have reshaped incentives across property and Isabel Black

capital markets. With limited RBA flexibility, Australia is entering EquityIsabel.Black@morganstanley.comStrategist +61 2 9775-2519

a must-have slowdown with housing and consumer activity

facing rising pressure. We add to our Banks UW, tighten

Industrial positioning and high-grade Materials OW.

Key Takeaways

Despite meaningful underperformance vs. peers, the ASX200 continues to Exhibit 1 : Australia Macro+ MP Changes

discount domestically sourced earnings risks. Preference for capex vs. Ticker Company Name Sector Active Wgt (bp)

Model Portfolio Additions

consumption held. AIA Auckland International Industrials & Transport 200

CHC Charter Hall Group Real Estate 100

Increasing UW in Banks to 741bp with weight decreases to WBC and NAB. LYCQAN LynasQantasRareAirwaysEarths MetalsIndustrials& Mining& Transport 150150

Housing super cycle is over and game has changed for housing. Valuations need ModelCOL PortfolioColesDeletionsGroup Consumer Staples

to adjust. PLSTLS TelstraPLS GroupGroupLtd MetalsTelcos &&InfraMining& Utilities

High-grading long-held Materials OW with increases to diversified names and Source: Morgan Stanley Research

Gold. Switch PLS for LYC and retain Energy OW including uranium.

Exhibit 1 : Australia Macro+ MP Macro Sector