Fund Picks Amid $50T Shift: Amazon, LVMH Favored

Key Takeaway

• Jack Dwyer highlights consumer behavior's impact on stock picks, with a focus on companies like Amazon and LVMH benefiting from aspirational products.
• Structural changes and demographic shifts, including a $50 trillion wealth transfer to millennials and Gen-Z, are key to investment decisions.
• Rob Hinchliffe sees growth opportunities in stocks like Microsoft and Nvidia amidst market pressures, emphasizing undervalued selections.

Consumer Focus in Stock Selection

Portfolio manager Jack Dwyer of Infusive Asset Management emphasizes the paramount importance of the consumer in assessing the growth prospects of companies. In an upcoming CNBC Pro Talks session, Dwyer will share insights into how consumer behavior influences his stock picks. Infusive’s Consumer Alpha Global Leaders Fund boasts top holdings in major tech and consumer brands such as Amazon, Netflix, Alphabet, McDonald’s, LVMH, and PepsiCo. Dwyer advises against generalizing consumer strength based on geographic regions and points out a notable divergence within the luxury sector, with brands like LVMH, Richemont, and Hermes experiencing a re-rating in recent weeks. He attributes their success to the development of aspirational, clickable, and shareable products.

Structural Changes and Demographic Shifts

Highlighting the impact of structural changes, Dwyer points to intergenerational wealth transfers and the rise of millennials and Gen-Z as significant factors. These demographics, poised to benefit from a $50 trillion wealth transfer, are inclined towards the experience economy and are expected to make purchasing decisions that reflect their values and preferences. Dwyer's commentary underscores the importance of considering these major structural forces, beyond the immediate impacts of Federal Reserve policies or current news headlines, in making investment decisions.

PineBridge Investments' Global Strategy

Rob Hinchliffe of PineBridge Investments manages over $1 billion in assets through the Global Focus Equity Fund, which has outperformed its MSCI All Country World Index benchmark with a 9.9% year-to-date return as of March 31. Hinchliffe’s strategy involves a style-neutral approach, focusing on stock selection without a bias towards market caps or growth versus value stocks. His fund's top holdings include tech giants like Microsoft, Alphabet, and Nvidia, but he also sees value in under-the-radar stocks such as TE Connectivity, Legrand, Walmart, and Thermo Fisher, citing their potential for growth in various sectors.

Investment Opportunities Amid Market Pressures

Despite challenges posed by geopolitical tensions and persistent inflation, Hinchliffe remains optimistic about finding investment opportunities. He emphasizes the importance of identifying stocks that are undervalued by the market, leveraging a rigorous stock selection process to beat the benchmark. His approach reflects a broader sentiment among fund managers that, even in uncertain market conditions, there are always opportunities to be seized by astute investors.

Street Views

• Jack Dwyer, Infusive Asset Management (Neutral on the consumer sector):

  "We are seeing brands bifurcate. The stocks have rerated (LVMH, Richemont, Hermes) in recent weeks and there are always cycles. Yet, critically, these brands develop products which are aspirational, clickable and shareable." "It is these demographics, who will be beneficiaries of the largest wealth transfer ($50 trn) and they are consumers of the experience economy and will vote with their wallets."