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Earnings leadership, business quality, and valuation discipline are the key pillars that guide Trent Masters in constructing the portfolio for the Alphinity Global Equity Fund (ASX: XALG). As one of four co-portfolio managers within Alphinity’s six-member global investment team, Masters helps oversee a concentrated portfolio of 25–40 high-conviction global stocks. The team seeks to allocate capital across cyclical, growth, and defensive companies, wherever there is potential for earnings surprises. 

"We believe the co-portfolio manager structure allows us to best leverage over a century of combined investment experience within the team,” Masters explains. “Each portfolio manager leads coverage for specific sectors, but all investment decisions are made collaboratively to ensure the focus always remains on the overarching portfolio outcomes."

In this video wire, Masters outlines the team’s distinctive investment process, which blends traditional bottom-up fundamental research known as "bottom-up stock picking" with a quantitative process to refine the opportunity set. “The quantitative process helps narrow the vast global universe to a subset of stocks we call ‘Alphinity stocks’,” says Masters. “We then apply deep fundamental research to build conviction in those names and construct a portfolio of high-quality companies we believe can outperform market expectations.”

Finding earnings leaders 

The fund has returned investors 14.8% per year* after fees for the past three years to May 31, 2025, and Masters attributes this success to disciplined risk management while identifying companies with strong earnings trajectories. Such an approach leads to investments such as Netflix (NASDAQ: NFLX), where the stock has surged 89% over the past 12 months. Masters says the investment team has been trimming the position slightly to take profits, but remains bullish on the outlook.

“We saw a meaningful pivot towards profitability in 2023,” says Masters. “This was even reflected in executive remuneration structures, which, for the first time, included targets linked to margin expansion and in 2024 we saw this take hold where margins expanded by approximately 600 basis points. In 2025 this margin expansion is continuing, return on equity is approaching 40%, and revenue growth remains in the teens with multiple levers to hold this growth".

Focusing on fundamentals, not macroeconomic forecasts

Rather than attempting to predict macro or geopolitical shifts, the fund remains focused on identifying undervalued companies entering earnings upgrade cycles. “Markets are currently experiencing what I’d describe as a bit of man-made trauma,” says Masters. “Some of the Trump administration’s policy proposals are creating turbulence, but we continue to follow the earnings leadership. We're not trying to make bold macro calls".

Recent portfolio activity reflects this philosophy. The fund has been trimming some select cyclical exposures while building positions in London-listed AstraZeneca, Chinese tech star Tencent (HKG: 0700) and Spain's CaixaBank (CABK.MC).

“CaixaBank is Spain’s largest lender,” Masters notes. “After 15 years of post-GFC deleveraging in Europe, banks are now operating with cleaner balance sheets, and we’re beginning to see a return to lending growth. And we are seeing this come through in Caixa's earnings profile. These earnings upgrades are establishing themselves in a bank that's currently trading on 10 times, which might be hard for Australian investors to wrap their head around when you have a comparison of 30 times with CBA."

Masters stresses the importance of maintaining diversification and avoiding excessive exposure to any single geography or sector. In today’s volatile geopolitical environment, he believes the key to navigating risk is owning resilient businesses with consistent earnings growth.

“Our goal is to build a portfolio of companies that can weather volatility while consistently outperforming market expectations,” he concludes. 

To learn more about how Alphinity manages risk and invests for the future please watch the video. 

Time Codes

• 00:25: the fund's structure, investing style
• 01:03: investing philosophy
• 02:35: earnings leadership and the macro
• 03:46: the role of quantitative analysis
• 04:28: two stocks Trent is bullish on
• 05:45: Netflix's success
• 07:10: How the fund is positioned for the future

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Alphinity Global Equity Fund (Managed Fund) (XALG)

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