Alphinity Investment Management is maintaining its stock selections despite increasing market volatility spurred by Middle East tensions. Elfreda Jonker, client portfolio manager at Alphinity, believes that reacting impulsively to uncertainty can lead to errors. The firm’s strategy focuses on monitoring company earnings and ignoring short-term headlines, anticipating a swift market correction with any policy shift from global leaders.
Alphinity Investment Management is a boutique money manager overseeing $27 billion. They translate investments into understandable narratives for advisors and clients, bridging the gap between the trading desk and the outside world. Amidst the market shifts, Alphinity has made tactical adjustments, such as switching from Coles to Woolworths in the supermarket sector, a decision that proved beneficial during the February reporting season. They have also reduced exposure to broader consumer sectors due to rising cost-of-living pressures.
Jonker notes that one area of frustration has been the technology sector, particularly the “anti-artificial intelligence” sentiment impacting stocks like Life360 and TechnologyOne. Despite strong financial results from these companies, their shares have been affected by a broader tech sell-off. Alphinity is holding firm, reasoning that the market underestimates the capacity for these companies to use AI to improve their businesses.
Alphinity’s $505 million Australian share fund has performed strongly, up 10.4 per cent in the three months to February after fees, outperforming the S&P/ASX 300 index by 3.3 per cent. Over one year, the fund has climbed 18.6 per cent against the benchmark’s 16.4 per cent. This success is attributed to a strategy of selecting winners and avoiding underperformers, resulting in an impressive 85 per cent hit rate during the February reporting season.
