Glenn Freeman: I'm talking to Jonas Palmqvist from Alphinity Investment Management. And you're going to show us 3 Top Picks, or in this case, I think it's two, but you've spoken about there's one area, one company in the cyclical space.

Jonas Palmqvist: Yeah. So, we have been struggling to find really strong earnings cases in the cyclical side of the market in last year, but there are a few. And one that has taken a prime spot in the fund is Ingersoll-Rand. It's a U.S. industrial. They're a global leader in HVAC; so, heating, ventilation, air conditioning. They have some of the most modern systems and a very strong service business as well attached to it.

Now, there are two parts of the earnings drivers here. One is, obviously, cyclical. So, that's construction, renovation, and that's been doing okay, especially in the U.S. But what's more interesting, and this is what attracted us to the stock in the first place, there's a structural growth story coming from the fact that greenhouse gas emissions are a big issue in HVAC. So, air cons, especially in the commercial space are actually a big culprit. So, demand is driven not just by the cycle, there is a separate growth story here from more of an ESG angle.

Freeman: You've got another name, it's on the defensive and on the growth side of the story.

Palmqvist: Yeah. We have a stock called American Tower, and this is a core holding. It's been in the portfolio for a while. It's North American. So, they own wireless towers for mobile data and communication. They've got a U.S. business, which is very solid and growing, and then half the business is actually international. They've got some assets in emerging markets, high-returning, high-growth. And American Tower is a high-growth company, 15% to 20% every year. Demand is driven by demand for more data, demand for higher speeds, and now we've got 5G coming in as the next growth leg.

The stock is high-returning. Customer churn is very low. Very fixed cost base. So, as you get top-line growth, it comes straight to the bottom-line. Not undiscovered. This stock is trading above 20 times cash flow. But if you look at the long-term growth case in this stock, we still don't think that fully reflects the value of what they're doing.