This has led to a dichotomy in valuations. Sectors such as financials look reasonable value relative to their historic trading multiples, while others such as health care are trading at all-time highs.

Looser monetary and fiscal conditions will likely boost sentiment and valuations in the near term. Nonetheless, investors can still find value in the Australian market.

Health care is an area where we see structural tailwinds and sustainable earnings growth. We are prepared to pay high multiples to access companies with strong balance sheets and stable, recurring income.

We also anticipate strong returns for leading companies with strong offshore earnings growth.

In the energy sector we favor firms well placed to ramp up large liquefied natural gas projects to exploit a tightening market into the mid-2020s.

Michelle Lopez is head of Australian equities and manager of the Aberdeen Australia Equity Fund.

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