Perpetual's Sean Roger on Finding Real Opportunities at a Time of Volatility

Why It Matters

Investors should reassess perceived safety in high-profile income stocks amid stretched valuations and prepare for sector-specific earnings pressure from cost inflation and demand weakness; geographic flexibility and selective stock-picking can uncover better yield and downside protection. Perpetual’s approach underscores that volatility is creating distinct opportunities and risks rather than an across-the-board retreat.

Summary

Perpetual portfolio manager Sean Roger says the firm is focused on macro risks including the Middle East conflict, inflation and interest-rate outlooks, and the disruptive second-order effects of AI across industries. He warns of margin-squeeze risks where rising costs and soft demand could hit earnings and balance sheets, and flags valuation risk in traditional Australian income stalwarts—banks, Telstra and Wesfarmers—which have seen multiples reach record highs and yields compress. Roger highlights the value of global flexibility in the Perpetual Equity Investment Company and cites UK kitchen-maker Howden Joinery as an attractively valued, cash-generative holding. He also notes significant underlying volatility on the ASX—particularly in small caps, tech and healthcare—which, while risky, is creating selective income opportunities for investors willing to look beyond top-of-market names.

Original Description

Geopolitical and macro shocks and an Australian stock market skewed by dislocations make it an uncertain time for income investors. But it's also a time of opportunity, says Perpetual's Sean Roger. Market dislocation has meant certain areas of the stock market now look attractive, with good yields and strong growth on offer for investors keeping their eyes open.

In this interview for Livewire's Income Series, Roger explains what Perpetual looks for in a quality stock and why those attributes are so important at a time like now. He also shares some quality ASX income picks, and one unlikely global name.

Time codes

0:14 - Macro market issues

1:58 - A big risk for income investors

3:24 - The importance of looking globally for income

5:23 - Areas of opportunity on the ASX

7:19 - How the CGT changes could impact income investing

8:43 - Perpetual's filters for finding quality stocks

10:23 - Soul Patts case study

12:00 - The Big Four Banks

13:24 - Outlook for ASX dividends