This article/video was produced by Livewire Markets and published on 30 November 2021.

It’s not earnings that drive share prices but surprises in earnings, says Alphinity global portfolio manager Jeff Thomson.

In this episode of Expert Insights, Thomson takes us inside Alphinity’s approach to investment strategy.

“It’s that surprise in earnings, where earnings are not only higher than the market expects, but also persists for longer,” he says. “And that is the lens we use. And we’re looking for quality companies within that.

“In terms of the way we position, it’s a stock-specific view. We tend not to take that top-down, thematic perspective.”

Thomson gives two examples of current Alphinity holdings. One, Microsoft, is an old favourite. The other, Universal Music, was recently spun out of Vivendi and is new to the portfolio.

Thomson says Universal’s existing business is outstanding, but licensing to alternative media such as Tiktok should prove immensely lucrative. Expecting growth of up to 10 times over the next decade is not unreasonable, he thinks.