A run in the ASX 200 has made outperforming the index more difficult than before. But equities strategists and fund managers are pointing towards retailers and other consumer discretionary stocks, as well as the industrial sector, as the best bet for shareholders – despite increasingly stretched valuations.

That’s because the most recent personal tax cuts, which came into effect on July 1, as well as state and federal energy rebates, are helping line wallets, according to Perpetual and MST Marquee, leading to a better than expected earnings season for many retailers.