Who is the Best Multi-Asset Fund Manager in Europe?

Morningstar fund analyst Muna Abu-Habsa reveals the multi-asset funds in the running for the Morningstar award

Muna Abu-Habsa 13 February, 2018 | 2:07PM

Morningstar analysts across Europe put multi-asset funds through a rigorous evaluation to determine who should be in the running for the fund manager of the year. They weighed up 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 – performance, and costs.

Fund Manager of the Year Finalists for Multi-Asset and Alternatives

Manager: Paul Causer, Paul Read and team

Nominated for work on: Invesco Pan European High Income, IP Distribution and IP Monthly Income Plus

Although best known for their work within fixed income, Paul Causer and Paul Read are also among the most successful income fund managers in the European multi-asset space. They started working together at Invesco in 1995, and are leaders in a highly accomplished and experienced team of 20 fixed-income professionals at Invesco.

They invest with an unconstrained approach that is focused on finding good value primarily based on their macro analysis. This led them to lean on financials after the financial crisis, and more recently on high yield names, as they have found very little value in European government bonds. In managing multi-asset funds, such as the Silver-rated Invesco Pan European High Income, Causer and Read are responsible for fixed income security selection and asset class weights but leave the equity team to manage their sleeve independently.

The approach has brought very strong results: the Pan European High Income fund is in the first percentile in its EUR Cautious Allocation category in the trailing ten year period.

Manager: Cayetano Cornet, Juan Bertran and Alvaro Martinez

Nominated for work on: Pareturn Cartesio Equity and Pareturn Cartesio Income

In light of their stability, experience, and strong stewardship, we hold fund managers Cayetano Cornet, Juan Bertran and Alvaro Martinez in high regard. The three fund managers have worked together since the inception of the firm in 2004 and have on average more than 20 years of investment experience. We rate two strategies, a flexible and a defensive allocation strategy, that the managers run, both with the highest Morningstar Analyst Rating of Gold.

The team’s experience and the well-executed and long-term oriented approach are key to the success of their funds. What also stands out is the exemplary alignment of the fund managers’ interests, who have invested almost all of their financial net worth in the funds they run, in addition to being partners in the firm. In addition, their long-term mindset and focus on downside risk and capital preservation are key features of their approach.

Below average fees add to the funds’ appeal for investors. The consistent execution of the managers’ well thought out process has resulted in favourable returns for investors over different time frames with lower risk metrics. These funds are not available to UK investors.

Manager: Jean-Charles Mériaux and Philippe Champigneulle

Nominated for work on: Eurose and DNCA Invest Eurose

Jean-Charles Mériaux and Philippe Champigneulle are veteran investors with more than 20 years of investment experience on equities and fixed income, respectively. They have successfully steered the Silver-rated cautious allocation strategy Eurose since 2003 and 2009, respectively, with the help of a compact but effective team.

We also appreciate their personal investments in the funds they run as evidence of their commitment alongside investors. The duo applies a straightforward process driven primarily by the assessment of relative valuation: they do not try to time the market but instead focus their efforts on comparing the risk-return characteristics of different instruments issued by the companies they know well.

This approach has led them to favour equities over the past five years based on the perceived overvaluation of bonds relative to stocks. Security selection within the equity sleeve has also been very sound over time, with a focus on value and dividend paying stocks. Over the duo’s watch, Eurose has regularly outperformed competitor funds while also limiting drawdowns in bear equity markets, thanks to diversifying exposure in its fixed income sleeve. These funds are not available to UK investors.

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
Invesco Pan European Hi Inc C EUR Acc22.36 EUR0.03
IP Distribution Acc Net117.39 GBP0.04
IP Monthly Income Plus Acc324.23 GBP0.00
About Author

Muna Abu-Habsa  is a senior investment research analyst at Morningstar