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Morningstar's Manager Check Up

REAFFIRMED RATINGS: Morningstar's Jonathan Miller explains why analysts positively rate Lindsell Train UK Equity, Schroder Asian Total Return and Robeco US Premium Equities

Jonathan Miller 29 November, 2017 | 2:40PM

 

 

Jonathan Miller: It’s time for our weekly look at fund reviews carried out by the Morningstar fund research team.

The Lindsell Train UK Equity fund’s been run since launch by Nick Train and over the course of his career, he’s shown how his differentiated approach can prove successful across a variety of market conditions. He looks for unique and high-quality companies that offer a high and sustainable return on equity, show low capital intensity, and are cash generative. This result in a concentrated portfolio with very low turnover, that reflects Train's long-term approach and buy-and-hold strategy. Consumer names are a clear bias in the portfolio and the emphasis on quality companies has led to strong performance in weaker markets. Then when we consider the well-defined and consistently applied process, plus the competitive fee structure, the fund holds a Morningstar Analyst Rating of Gold.

The Schroder ISF Asian Total Return fund is managed by veteran managers Robin Parbrook and King Fuei Lee. They’ve worked together for 16 years, have great synergy and we hold them in high regard. They’re supported by 36 analysts and when building the portfolio, aren’t constrained by the index. By having an absolute return focus they also look to mitigate risk through hedging and have shown unique downside resilience.

Stock picking is carried out through a rigorous, quality-growth focused process. Looking at dividend yield and free cash flow helps to find more stable names and we feel the analysts are meticulous in further deep dives they carry out. A top down model also guides country exposure and we believe the fund possesses a number of best-of-breed characteristics, meaning it carries the top Morningstar Analyst Rating of Gold.

Duilio Ramallo became the manager of the Robeco BP US Premium Equities fund in October 2005 and looks for companies he believes are undervalued. With this value style approach he focuses on fundamental bottom-up analysis, honing in on valuation, fundamental factors, and catalysts for change. There’s roughly 30 analysts conducting their research according to this philosophy and over time this has been a stable team. The strategy is all-cap and the portfolio's exposure to mid- and small caps is above average for its peer group.

While it also tends to hold more attractively valued stocks than the average value-oriented peer. The fund aims to limit losses in during market falls and keep pace in rallies. It’s has achieved over the long term although in more recent downturns this has been less evident due to cyclical exposure. Overall we believe there’s a lot to like and the fund maintains its Morningstar Analyst Rating of Silver.

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
CF Lindsell Train UK Equity Acc388.90 GBP0.66
Robeco BP US Premium Equities F €225.40 EUR0.50
Schroder ISF Asian Total Ret C304.50 USD1.01
About Author

Jonathan Miller  is Director of Manager Research, Morningstar UK