Rudi’s View: Diversified Asset Allocators

Array
(
    [0] => Array
        (
            [0] => ((WES))
            [1] => ((SOL))
            [2] => ((TPG))
            [3] => ((TUA))
            [4] => ((IFT))
            [5] => ((SGH))
            [6] => ((BSL))
            [7] => ((GMG))
            [8] => ((NXT))
            [9] => ((MEZ))
            [10] => ((AUB))
            [11] => ((BXB))
            [12] => ((AIA))
            [13] => ((AMC))
            [14] => ((ASX))
            [15] => ((AUB))
            [16] => ((BXB))
            [17] => ((DMP))
            [18] => ((DXS))
            [19] => ((EDV))
            [20] => ((JHX))
            [21] => ((RHC))
            [22] => ((SDR))
            [23] => ((SPK))
            [24] => ((WDS))
            [25] => ((WTC))
        )

    [1] => Array
        (
            [0] => WES
            [1] => SOL
            [2] => TPG
            [3] => TUA
            [4] => IFT
            [5] => SGH
            [6] => BSL
            [7] => GMG
            [8] => NXT
            [9] => MEZ
            [10] => AUB
            [11] => BXB
            [12] => AIA
            [13] => AMC
            [14] => ASX
            [15] => AUB
            [16] => BXB
            [17] => DMP
            [18] => DXS
            [19] => EDV
            [20] => JHX
            [21] => RHC
            [22] => SDR
            [23] => SPK
            [24] => WDS
            [25] => WTC
        )

)

This story features WESFARMERS LIMITED, and other companies.
For more info SHARE ANALYSIS: WES
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

Listed investors such as WH Soul Pattinson and Wesfarmers have proven strong wealth creators over long periods of time

By Rudi Filapek-Vandyck, Editor

Boasting a total return in excess of 1300% over the past twenty years (CAGR of 14.31% annually) or 430% over the past ten (CAGR 18.15% p.a.), I don’t think there is much debate among local investors whether owning shares in WA-based conglomerate Wesfarmers ((WES)) has been a smart move or not.

My personal memory involves discussing the company with investors prior to one of my presentations. I told them I had just purchased shares on behalf of the All-Weather Model Portfolio at around $31.

Some of those investors shared with me they were still holding out, but would purchase shares as soon as they’d hit the $30 mark.

The latter never happened and the anecdote always remained with me. With the share price yet again surging above $80 after management’s latest briefing with local investment professionals this week, I hope those investors still bought shares, but I don’t think they did.

Sometimes the trick to making successful investment decisions is to not get hoodwinked by the here and now. Or how not to miss out on an extremely profitable investment when another dollar off the purchase price doesn’t matter in the long run.

That’s exactly what I told those investors at the time, by the way. I had to look up the timing of all this happening. The price chart on the ASX website tells me it was either in 2020, when covid spooked the market, or in late 2018-early 2019.

I think it was the latter.

The one portfolio holding that shares a lot of commonalities with Wesfarmers is Washington H Soul Pattinson ((SOL)), sometimes referred to as Australia’s equivalent of Warren Buffett’s Berkshire Hathaway, other times ‘Soul Pats’ is presented as this country’s only true blue dividend aristocrat.

This company’s self-proclaimed claim to fame is it never missed a dividend since listing in 1903 with ordinary dividends increasing in every year since 1998.

More importantly, Soul Pattinson has turned itself into a modern diversified investment vehicle now carrying investments in listed equities (local and elsewhere), private companies, private credit, and real assets.

The unwinding and absorbing of the cross shareholding with Brickworks and the acquisition of Milton in 2021 convinced me this was a dusty, old style franchise that was actively transforming itself into something bigger and better.

In a market that is desperately struggling for sustainable direction, Soul Pats shares are trading near an all-time record high.

I think I got that one right.

As your typical buy-and-hold investor –I do like to own equity in high quality companies that are able to create added-value over long periods of time– I’ve come to appreciate the benefits of holding Wesfarmers and WH Soul Pattinson in the portfolio.

Sure, there are differences, and in both cases big swings in share prices have on occasion occurred, but the correct way to view these companies, in my humble opinion, is not by using labels such as ‘retail’ or ‘coal’, but to see them as savvy investors who tend to do a better job at it than your 13-in-a-dozen listed funds manager.

Conglomerate, a label often used to describe Wesfarmers, seems equally faulty. I think diversified capital allocators is probably the best suited label. It’s what these businesses do, and do well.

When Soul Pattinson starts selling down its shareholding in long-held investments in TPG Telecom ((TPG)) locally and in Singapore-based Tuas ((TUA)), my own personal rule is other investors should think twice about owning shares in these companies.

Personally, I have been surprised by how long that equity ownership in TPG Telecom remained in place. It’s not as if that company had been shooting the lights out, to put it mildly, but then I am not part of that investment committee and performances are not solely judged on one single investment decision.

That’s the power of such portfolios.

The FNArena-Vested Equities All-Weather Model Portfolio currently owns shares in Wesfarmers and WH Soul Pattinson, but there are two other peers on the ASX I believe that should equally have investors’ interest.

New Zealand-headquartered Infratil ((IFT)) has featured in our stories a number of times in recent years, while SGH Ltd ((SGH)), once upon a time known as Seven Group Holdings, has equally grown up, so to speak, over the past five years or so.

Goes without saying, they are all the same at the core, but different in execution and outcomes. Infratil is now inextricably linked to the global data centres narrative while SGH has a more distinct cyclical character.

The latter’s share price is equally under pressure because of ongoing attempt to acquire BlueScope Steel ((BSL)), which prefers to travel solo.

I have now added a new addition to my curated lists on the website, to show this type of diversified asset allocators remains on my personal radar.

I’d be hesitant to add Infratil to the Portfolio, but that’s because of similar exposure through Goodman Group ((GMG)) and NextDC ((NXT)).

Shares in SGH are currently trading more than -20% below FNArena’s consensus price target of $50.11.

The case for Infratil was recently laid out in the following story:

https://fnarena.com/index.php/2026/05/28/cdc-renewables-power-infratils-potential/

An in-depth story on SGH Ltd will be published in the week ahead.

We have equally a follow-up on Wesfarmers’ investor briefings in preparation.

My curated lists via the All-Weathers section: https://fnarena.com/index.php/analysis-data/all-weather-stocks/
 

Best Buys & Conviction Calls

Morningstar’s latest update on Best Buy ideas on the ASX has seen the removal of NZ-based Meridian Energy ((MEZ)) following a steady share price appreciation since March.

Insurance broker AUB Group ((AUB)) and wooden pallet champion Brambles ((BXB)) have been added.

As such, the selection of Best Stock Ideas now consists of the following:

Auckland International Airport ((AIA))
Amcor ((AMC))
ASX Ltd ((ASX))
AUB Group ((AUB))
Brambles ((BXB))
Domino’s Pizza Enterprises ((DMP))
Dexus ((DXS))
Endeavour Group ((EDV))
James Hardie Industries ((JHX))
Ramsay Health Care ((RHC))
SiteMinder ((SDR))
Spark New Zealand ((SPK))
Woodside Energy ((WDS))
WiseTech Global ((WTC))

For those investors not yet familiar with Morningstar’s style of identifying great investments, the focus tends to be on cheaply valued businesses regardless of the immediate outlook, inherent quality or specific circumstances.

Some stocks selected can remain on that list for a long time or might eventually be removed without re-rating towards fair value. Bapcor springs to mind and it’s not as if Dexus or Ramsay Health Care were only yesterday included either.

FNArena Talks

Our latest video interview features myself being interviewed by FNArena’s Danielle Ecuyer about the grand themes that featured in my presentation to investors in Toowoomba.

The slides of that presentation are available through the Special Reports section on the website.

https://fnarena.com/index.php/fnarena-talks/2026/06/05/changing-markets-changing-economies/

On Youtube: https://www.youtube.com/watch?v=Xyw02XFryKI

(Do note that, in line with all my analyses, appearances and presentations, all of the above names and calculations are provided for educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions.)  

P.S. I – All paying members at FNArena are being reminded they can set an email alert for my Rudi’s View stories. Go to My Alerts (top bar of the website) and tick the box in front of ‘Rudi’s View’. You will receive an email alert every time a new Rudi’s View story has been published on the website. 

P.S. II – If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

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