Global stocks may face pressure from geopolitical tensions and sticky inflation, but one portfolio manager sees potential in a few stocks. “In all market conditions, there are always investment opportunities,” Rob Hinchliffe, managing director and equity analyst at Pinebridge Investments, told CNBC Pro last month. We look for stocks that we think are better than what the market currently thinks.” Hinchliffe manages more than $1 billion in assets at Pinebridge through its Global Focus Equity Fund. The fund was launched in 1999 and holds about 40 stocks. Morningstar gives the fund its highest rating of five stars, indicating that it is one of the top performers. Pinebridge’s Global Focus Equity Fund had a year-to-date return of 9.9% through March 31, beating the 8.1% return of its benchmark MSCI All Country World Index. In 2023, the fund returned 27.4%, beating the MSCI benchmark’s 22.2%. “We hold common stocks in our portfolio for more than four years What we try to do is beat the benchmark by creating a portfolio that resembles the market from a risk perspective,” says Hinchliffe. This means the fund is style neutral and focuses entirely on stock selection. “We don’t think small-cap stocks are better or worse this year than last year; We don’t think growth stocks are better than value stocks. We just want to make sure that we grow at the same rate as last year. markets, similar market caps, minimize the biggest risks we don’t want and focus on where we think we have the tools to help us find the right stocks to invest in. Stock Picks Hinchliffe believes some stocks are doing well right now. His fund’s top holdings include Microsoft (6.5%), Alphabet (4%) and Nvidia (3.7%) – all of which are part of the so-called “Big Seven”. The portfolio manager noted that they “clearly outperformed the market last year based on overall excellent earnings growth.” However, Hinchliffe said his fund has an underweight rating on the Big Seven. Instead, he sets his sights on five under-the-radar stocks that offer “a lot of opportunity.” These include US-based Swiss electronic component company TE Connectivity and French company Legrand, which designs and manufactures electrical equipment. “We have had TE connectivity for many years. It is considered an IT company, but its largest business is supplying the automotive industry. It also provides data centers, so it covers a lot of ground,” Hinchliffe said. For the consumer discretionary sector, fund managers are optimistic about supermarket chain Walmart. “We’ve had this for several years…Our investment thesis is that Walmart’s potential growth in digital advertising (driven by the amount of customer data that Walmart has and can monetize)” has a profit margin “far greater than that of traditional retail operations.” Elsewhere, he’s looking at the healthcare industry – specifically Thermo Fisher. The company accounts for 3.1% of its funds and is one of 10 holdings. “Thermo Fisher is a great company because they are really involved in everything from drug discovery to drug manufacturing. So their company parts are ahead and their business parts are further behind. (healthcare sector) route,” he said, adding that he expects the company’s “real performance” to continue in the future as demand for its products increases as people’s desire for a healthier lifestyle increases and demand for advanced healthcare equipment increases.
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