S&P/ASX 200 Index (ASX: XJO) shares finished in the green on Friday, up 0.08% to 8,603 points.
James Gerrish from Shaw and Partners says his Market Matters team is looking to tweak their portfolios for the new financial year.
In his latest Market Matters newsletter, Gerrish commented on the FY25 market:
After a fascinating FY25, which saw valuations in some pockets stretch far higher than many thought possible, we must keep focussed on portfolio positioning for what potentially comes next and not be anchored to what has just been.
The Market Matters team remains "cautiously bullish" toward ASX 200s for the rest of 2025.
In his newsletter, Gerrish let us in on one ASX 200 large-cap share that his team recently sold to realise terrific profits.
ASX 200 large-cap stocks are companies with a market capitalisation above $10 billion.
He also discussed another ASX 200 large-cap share that the analysts intend to sell shortly for the same reason.
He reckons that one will be "an unpopular call".
Fundie selling 2 ASX 200 large-cap shares to realise tremendous profits
The Market Matters Active Growth Portfolio holds several ASX 200 large-cap shares.
Gerrish and his team have made some recent adjustments, including taking some profits on a darling of the technology sector.
The share they sold was Xero Ltd (ASX: XRO).
Gerrish commented:
Last week, we took profit on our Xero (XRO) position, and switched 1% of our Sandfire Resources Ltd (ASX: SFR) holding into BHP Group Ltd (ASX: BHP).
Cloud-based accounting software provider, Xero, was one of the top 5 ASX 200 tech shares of FY25 for share price growth.
The Xero share price rose by 32% to $179.80 in FY25. The stock is up 95% over the past five years.
On Friday, the Xero share price closed at $178.01, up 0.86%. The Xero share price hit a record $196.52 per share last month.
The 'unpopular call'
Market Matters also has an Active Income Portfolio.
The portfolio holds income shares, exchange-traded funds (ETFs) and other listed income securities.
Gerrish reveals his team is getting ready to sell the biggest ASX 200 large-cap, Commonwealth Bank of Australia (ASX: CBA) shares.
A point of order here.
CBA is technically not a large-cap anymore; it's a mega-cap because its market capitalisation is above $200 billion. In fact, it's well above.
On Friday, CBA shares had an astounding market cap of $300.7 billion.
The CBA share price has surged amid a phenomenal run for ASX 200 large-cap bank shares that began in November 2023.
Over FY25, CBA shares rose 45% to close at $185 per share on 30 June.
That was just a few days after CBA stock hit a record high of $192 per share.
Since November 2023, CBA shares have risen by 78%. On Friday, the CBA share price closed at $178, down 0.94%.
Gerrish says the CBA share price is now "well beyond the point where it makes sense on traditional/historical fundamentals".
He also notes that CBA shares make up about 12% of the ASX 200 index.
Gerrish explains the team's decision to sell CBA shares:
This may well be an unpopular call, but we feel uncomfortable that new members may be buying CBA, or investors adding funds to Market Matters Invest are increasing their exposure to the world's most expensive bank, trading on what we believe is a very stretched valuation.
While there is no choice for ETF investors buying the ASX 200 (with $11.50 of every $100 invested being allocated to CBA), as stock pickers, we can make a bold call like this.
We've considered many of the arguments for holding our position, and there has been plenty of internal discussion about not fighting the tape, but we ultimately believe that the weight of probability now favours a sell.
Gerrish and his team are sitting on an approximate 250% profit with their CBA position.
He says:
Because CBA is such a well-loved stock, and the position is showing a profit of ~250%, it would be easy to simply put it in the bottom drawer and retain exposure, though that is not the MM style.
We made a similar call recently in a much-loved stock of MM's by selling Xero (XRO), and as we look ahead into FY26, we believe there are better uses for this capital.
We are now looking to sell CBA in the Income Portfolio (que the jeers!)
