00:00 Speaker A
Joining me now. We’ve got Thomas Martin, Global Investments Senior Portfolio Manager. Your strategy right now is to maintain diversification. So walk us through how you’re doing that.
00:16 Thomas Martin
Yeah, so, uh, we have exposure to, uh, uh, really all aspects of the equity markets, um, both in the United States and abroad. Um, but we’re fairly neutral in terms of, uh, that, uh, that exposure with regard to growth and value, um, and large and small. Um, our biggest overweight really is in the mid-cap stocks, um, and in mid-cap growth. Uh, and we are underweight in international companies, but we still have, you know, um, some decent exposure there. Uh, we have, uh, a duration neutral in fixed income, uh, and we have some, uh, I guess one place where we’re a little bit, um, kind of more diversified or more conservative is to have a little bit of dry powder and cash that we can use going forward. Um, and in the alternative space, we have a fairly, uh, large exposure to gold and the gold miners, um, which has been a good substitute for the equities at as it’s been about as strong as those markets have been.
02:12 Speaker A
And so, all that in mind coming into the start of this week, we are already 98% of the way through the S&P 500 earnings reports. And so as we essentially kind of close off this earnings season, what are the anticipations for how investors should position themselves knowing that there are going to be some areas where there was no guidance or, uh, diminished guidance that they’re going to have to kind of measure up against. Does that set us up for any type of relief in the next earning season?
03:13 Thomas Martin
Well, I think what’s interesting about the earnings is that, uh, for the first quarter, uh, coming into the quarter, we were looking for about 7% growth, um, and exiting the quarter with the actual experience. It was about 13% growth. Now, in the meantime, uh, the estimates have been lowered for the second, uh, third and fourth quarter. And so therefore, for the full year, so, uh, growth expectations have come down, um, a bit, notwithstanding the strong quarter. And there are a lot of cross currents in the market. Um, companies are are not getting any credit for saying they they don’t know what’s going to happen. Um, and companies that are saying, you know, where we have some degree of confidence, um, are getting credit for that. So, uh, our our approach has always been an earnings based approach, uh, and, uh, looking at what happens with their estimates. Um, and so we want to focus on those companies that are able to work their way through it and deemphasize the companies that are having more struggles.
05:02 Speaker A
And so, according to data from FactSet, magnificent seven companies reported earnings growth above 25% for the first quarter. So for the other 493, what do those opportunities look like, especially as it relates to maintaining their earnings growth or trying to solidify confidence among investors and where are those opportunities from your perspective?
05:52 Thomas Martin
Yeah, so you still have opportunities, um, in the, uh, in the healthcare area, although the stocks certainly haven’t, um, reacted very well. Um, but there’s the earnings growth there, um, is going it is expected to be above 10%. Um, and, you know, we see opportunities in the communication services sector. So there are a number of companies there that are in the more entertainment, um, type economy, the experiences economy, uh, and we want to be focused on those names. Um, those companies are reporting pretty well. Um, you know, consumer names that are also in the experiences area, uh, are fairing well. Um, and so we we want to have some exposure there. Um, also, uh, uh, in the industrials area, uh, the AI trade, the electrification trade, um, those are companies that are continuing to see, um, you know, good prospects not just now, but, um, for quite a while into the future.
link
