Crispin Murray: Time to focus on earnings
Crispin Murray, Head of Equities Strategies at BT Investment Management, says the recent reporting season has reinforced a change in what he believes will be the key driver of returns for investors. Murray highlights that during the past four years a strategy of holding mega-cap high yield stocks would have delivered returns well above the market. “We refer to them as ‘The Retail 7’… now if you owned those stocks through the cheap money era… you would have had a return which was about 7% per year above the overall market. You’ve really done well just owning those big brand names that we all know and love. Interestingly, since the end of March those stocks have begun to underperform. That highlights that the yield thematic is no longer the dominant driver of the market and the underlying earnings is going to be the key factor to look for.” Click the (VIEW LINK) to watch the presentation to understand the factors Murray believes can change company earnings outcomes.