The analysts at IML Australian Share Fund are not beating about the bush.
In a memo to clients, they said in no uncertain terms that the current market and economic situation is delicately poised.
"The outlook for the economy, inflation and interest rates remains uncertain, as central banks try to balance the risks of continued high inflation with further financial instability."
So what does that mean for its stock portfolio?
"We continue to position the portfolio in well-established industry leaders with competitive advantage, recurring earnings, strong balance sheets and capable management teams."
To demonstrate, the IML team named three S&P/ASX 200 Index (ASX: XJO) shares it's confidently backing at the moment:
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These industry leaders are set to fight through economic anxiety
When it comes to industry leaders, a prototypical example in Australia is telecommunications giant Telstra Group Ltd (ASX: TLS).
The IML team noted how the stock surged after announcing a half-year profit boost in excess of 25%.
"It also reconfirmed its intention to cut $500 million of costs through to 2025 and increased its fully-franked interim dividend from 8 cents to 8.5 cents."
Indeed the share price is up 8.9% year to date, while paying out a dividend yield of 3.7%.
"We believe Telstra is well placed to continue to deliver growth and dividends in challenging economic conditions and a high inflation environment."
While Amcor CDI (ASX: AMC) is not a household name like Telstra, it nevertheless is a leader in the global packaging industry.
Its share price has dropped more than 6% year to date.
"While earnings were in line with our expectations, lower volumes in some categories and geographies led to some of Amcor's customers destocking inventory."
The IML analysts believe this is a short-term hiccup.
"We see this as relatively temporary, given most products are consumed relatively quickly, and believe Amcor remains well positioned for long-term growth."
Lotteries operator Lottery Corporation Ltd (ASX: TLC) has enjoyed an 11% rise in share price so far in 2023.
Its reporting season was strong, according to IML.
"Group revenue was up 8%, group EBITDA was up 16% and both of its business segments (Keno and Lotteries) grew in terms of customers and revenue."
The company has a monopoly in most states in Australia, with long-term licences.
"Its strong competitive advantage, loyal customer base and move to digital retailing have it well placed for continued strong growth even in tough economic times."
