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Fund Manager of the Year: European Equity

FUND MANAGER AWARDS: Has your European-equity fund manager been nominated for a Morningstar award this year?

Christopher J. Traulsen, CFA 14 February, 2013 | 8:00AM

The finalists among the nominees are now in for the fourth annual Morningstar European Fund Manager of the Year awards. Our analysts across Europe have pulled together to identify those managers who they believe are among the very best at what they do. Nominated managers should have had a strong 2012, but most importantly, they should have shown an ability to serve investors well over the long-term. Only managers who run funds that are Morningstar Medallists—meaning they earned a Gold, Silver or Bronze rating from our analysts—are eligible for nomination. To be a Morningstar Medallist, funds are put through a rigorous evaluation using our five-pillars methodology. In addition to performance, we weigh the quality of management, the strength of the process used to run the fund, the quality of the parent organisation—including how it treats investors in its funds—and costs.

The nominees for the European Equity Fund Manager Award are:
Nigel Bolton
Matthias Born
Jorik van den Bos

For the past three years, we have given only two of these prestigious awards across Europe: ‘Fund Manager of the Year: European Equity’ and ‘Fund Manager of the Year: Global Equity’. This year, we are also introducing the ‘Fund Manager of the Year: Euro Fixed-Income award’.

The managers nominated by Morningstar’s European analyst staff for each award are as follows. The winners will be announced at the Morningstar Investment Conference, Europe in Vienna on 14 March 2013.

Fund Manager of the Year: European Equity

Manager Name: Nigel Bolton
Nominated for work on:
BGF European (Morningstar Analyst Rating: Silver)
BGF European Focus (Morningstar Analyst Rating: Silver) 

Since moving over to BlackRock from SWIP in early 2008, Bolton has built one of the strongest European equity teams in the market. While co-managers are named on his funds and contribute meaningfully, he’s clearly the driving force in this unit. One key to this success is the loyalty he inspires in his staff—six team members who came with Bolton from SWIP in 2008 remain on the team today. He also smartly re-organised the team when he arrived at Blackrock, giving analytical responsibilities to managers, aligning them to sectors and established a unified research process. 

That process is rigorous, but not dogmatic. Bolton looks for companies with attractive medium to long-term earnings power at reasonable valuations, but will also go after more value-oriented restructuring and turnaround situations. He and his team remain cognisant throughout of the overall risks, including the prevailing macroeconomic and stock market environment. Impressively, this has allowed the funds to outperform their Europe Large-Cap Blend Equity peers in years as disparate as 2008 and 2009. Both offerings have also outperformed their category peers in every calendar year since he took the helm in early 2008. In 2012, they posted top-quartile results within their Morningstar category. 

Manager name: Matthias Born
Nominated for work on:
Allianz Euroland Equity Growth (Morningstar Analyst Rating: Silver) 

Matthias Born hasn’t run Allianz Euroland Equity Growth for a particularly long period—he only took the helm in October 2009. However, his tenure here belies his experience. Born joined Allianz in 2001 and cut his teeth working with Frank Hansen, one of our favourite small-/mid-cap managers in Europe, managing European and German equity portfolios from 2002 to 2007. He has also run Concentra, a German large-cap equity fund from 2007 and had built a top-quintile record there through the end of 2012. 

Born follows a dedicated stock picking approach, buying high quality companies that he believes have high structural growth potential. Admirably, he sticks to what he does well—he doesn’t veer into lower-quality issues when the market favours them and doesn’t flinch when his style is out of favour. He’s also truly active, with active share ranging from 60% to 75% over the past three years. Nevertheless, his focus on higher-quality growth has helped Born keep the fund’s downside risk considerably lower than his category rivals, allowing him to generate excellent risk-adjusted returns for investors during his tenure. He hasn’t given up much in the way of upside, however: indeed Born has guided the fund to a top 5% showing relative to its peers in every full calendar year at the helm. 

Manager name: Jorik van den Bos
Nominated for work on:
Kempen European High Dividend Fund (Morningstar Analyst Rating: Gold)

Jorik van den Bos came over to Kempen from ING in 2006 and brought two team members and a successful dividend-focused strategy with him. The process, which Jorik designed himself, has clear parameters that make it easily repeatable and is consistently applied. Van den Bos requires his picks to have a dividend yield of at least 2.5%, but isn’t interested in building a portfolio of low-quality high-yielders—instead he focuses on sustainability of the dividend, using scenario analyses and evaluating factors such as capital discipline, cash flow development, competitive advantages and dividend growth. In addition, van den Bos equal weights the bulk of the portfolio and rebalances quarterly, which helps limit the fund’s exposure to valuation and issue-specific risk.

The fund had a difficult 2007 and 2008 as might be expected, but has outperformed its Morningstar Europe Large-Cap Value Equity peers since then, including top quintile showings in 2010, 2011 and 2012. Notably van den Bos also delivered strong results in his tenure at his global dividend fund at ING from 2001 to 2005, so his success is far from a recent phenomenon.

Click here to discover who's been nominated Fund Manager of the Year: Global Equity. 

Click here to discover who's been nominated Fund Manager of the Year: Euro Fixed-Income.

The awards will be announced on 14 March 2013.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
Allianz Euroland Equity Growth A EUR147.95 EUR-0.51
BlackRock Global Funds - European Focus A219.95 EUR-0.16
BlackRock Global Funds - European Fund Class A2 EUR95.81 EUR-0.34
About Author Christopher J. Traulsen, CFA

Christopher J. Traulsen, CFA  is director of fund research, Europe and Asia, Morningstar.