It seems like the market is really focused on external factors that are very difficult to predict. And they might include what Mr. Trump is going to do next. It might be what the Federal Reserve is going to do next. But rather than focusing on these external factors that are very difficult to predict, we believe it’s better to focus on the fundamentals, the trends that are going to outlast these external events.
Given the risks that may emerge and reemerge over the course of the next few years, it’s very important to invest in companies that are resilient through these events, whether it be a possible economic slowdown or additional tariffs—whatever that may be. The other thing is there are many trends out there that are probably going to outlast many of these fluctuations, so trends towards more healthy, organic, natural foods and beverage and lifestyles—these trends are likely to continue. Demand for clean energy—that’s another thing that’s likely to continue for a long time. Premiumization in many categories and sort of craft everything—these are also trends that are probably going to be long lasting. Players that can benefit from these megatrends are likely to do well.
I think the most important risk that we focus on today is disruption risk. Given the advent of online retailing and other new technologies, it’s become a lot easier for new entrants to come in in many areas. So, making sure that your investments aren’t exposed to these disruption risks is a really important thing we have in mind.
I think one of the things to think about in this lower-growth environment is that perhaps it used to be that, given higher growth, certain businesses just did well regardless. Whereas in the future environment, the premium for companies that invest shareholder capital wisely is going to be greater. So I think that’s an often-overlooked area of emphasis that’s going to be important in a low-growth world.
Focus on Fundamentals, Not Predictions
Sammy Suzuki is Head of Emerging Markets Equities, responsible for overseeing AB’s emerging-markets equity business and instrumental in the formation and shaping of AB’s Emerging Markets Equity platform. He was also a key architect of the Strategic Core platform and has managed the Emerging Markets Portfolio since its inception in 2012, and the Global, International and US portfolios from 2015 to 2023. Suzuki has managed portfolios since 2004. From 2010 to 2012, he also held the role of director of Fundamental Value Research, where he managed 50 fundamental analysts globally. Prior to managing portfolios, Suzuki spent a decade as a research analyst. He joined AB in 1994 as a research associate, first covering the capital equipment industry, followed by the technology and global automotive industries. Before joining the firm, Suzuki was a consultant at Bain & Company. He holds both a BSE (magna cum laude) in materials engineering from the School of Engineering and Applied Science, and a BS (magna cum laude) in finance from the Wharton School at the University of Pennsylvania. Suzuki is a CFA charterholder and was previously a member of the Board of the CFA Society New York. He currently serves on the Board of the Association of Asian American Investment Managers. Location: New York