The domestic equities market is currently still favouring stock pickers and value investors, according to the head of equities at a major funds management firm.
"The biggest upside is where the market is not anticipating and that's where the most value is. There are still some undervalued cyclicals in our view but more of the undervaluation is in the defensive areas," Tyndall Investment Management head of equities Bob Van Munster said.
In regard to cyclical stocks, Van Munster said the media sector represented a good selection.
"Advertising and revenues have been hit quite substantially ... from a cyclical point of view there will be some upside," he said.
In reference to defensive stocks the sectors to follow are telecommunications and healthcare, Van Munster said.
While these industries are tinged with uncertainty because of changing regulation and government intervention, they still represented good value due to their necessity and resilient nature, he said.
"With healthcare there will probably be incremental change in terms of legislation to try and reduce healthcare costs, but at the end of the day they can't overcome the wave of the aging population and we do need healthcare and they will make good profits."
Despite this analysis Van Munster is still cautious about the year ahead.
"We're highly cautious ... it's not going to be an easy market where basically you buy anything that had leverage last year and you'll make money," he said..
