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Morningstar Fund Ratings: Weekly Round-up

ANALYST RATINGS: This week Morningstar analysts reveal upgrades for JPMorgan and AXA

Morningstar Analysts 14 May, 2019 | 9:06AM

New Ratings

Alger Small Cap Focus - Silver

Jeffrey Schumacher

We have initiated coverage on Alger Small Cap Focus with a Morningstar Analyst Rating of Silver. The fund benefits from an experienced manager and a distinctive approach. Portfolio manager Amy Zhang, who has been a key contributor for 12-plus years at Gold-rated Brown Capital Management Small Company, has taken the reins here since February 2016. She is a small-cap expert who runs this fund with a dedicated close-knit team. Zhang’s approach to small-cap investing stands out. Rather than focusing on market cap, she defines her universe in terms of revenues, focusing on firms with operating revenues of $500 million or less whose differentiated products or services satisfy emerging needs. This focus points Zhang and her team to innovative healthcare and technology names, which as of March 2019, comprised over 80% of assets in the 50-stock portfolio. Thus far, Zhang is off to a great start. Through April 2019, the fund’s 27.2% annualized gain almost doubled the Russell 2000 Growth Index’s and was one of the US small-cap equity Morningstar Category’s top performers. This outperformance hasn’t gone unnoticed, as investors have been pouring into the fund, and as of March 2019, strategy assets totalled $3.5 billion. Zhang has indicated an eye on capacity management, so the fund could close soon.  

Upgrades

JPM Emerging MarketsSilver

Andrew Daniels

JPM Emerging Markets is led by a talented portfolio manager who follows a well-codified approach and is surrounded by a deep team. The strategy’s many strengths lift its Morningstar Analyst Rating to Silver from Bronze. Leon Eidelman was formally recognized as this strategy’s lead manager in July 2016, though he’s been the primary decision-maker here since January 2015, when he was promoted to comanager alongside the well-regarded Austin Forey, who remains the backup manager today. Eidelman comes across as a savvy investor, has proven to stick to his knitting during challenging periods, and invests heavily in the strategy, all of which bode well for this strategy’s future. Eidelman is also well supported by the 100-member emerging-markets and Asia-Pacific equities team.

The process follows JPMorgan’s quality and growth focus, and has been consistently applied throughout time. Eidelman seeks 60 to 80 firms that boast quality franchises, consistent earnings streams, and solid returns on equity. The strategy has delivered for investors over time, and its appealing traits inspire confidence that such strong results will continue over the long term. Overall, this is an excellent option for global emerging-markets equity exposure.

JPM Emerging Markets Equity – Silver

Andrew Daniels

JPM Emerging Markets Equity is led by a talented portfolio manager who follows a well-codified approach and is surrounded by a deep team. The strategy’s many strengths lift its Morningstar Analyst Rating to Silver from Bronze. Leon Eidelman was formally recognised as this strategy’s lead manager in July 2016, though he’s been the primary decision-maker here since January 2015, when he was promoted to comanager alongside the well-regarded Austin Forey, who remains the backup manager today. Eidelman comes across as a savvy investor, has proven to stick to his knitting during challenging periods, and invests heavily in the strategy, all of which bode well for this strategy’s future. Eidelman is also well-supported by the 100-member emerging-markets and Asia-Pacific equities team. The process follows JPMorgan’s quality and growth focus and has been consistently applied throughout time. Eidelman seeks 60 to 80 firms that boast quality franchises, consistent earnings streams, and solid returns on equity. The strategy has delivered for investors over time, and its appealing traits inspire confidence that such strong results will continue over the long term. Overall, this is an excellent option for global emerging-markets equity exposure.

AXA Global High IncomeSilver

Evangelia Gkeka

The strategy is managed by two very experienced portfolio managers who utilise a differentiated and well-executed approach to high-yield investing. It focuses on capturing income from high-yield bonds while avoiding principal loss. The strategy has consistently outperformed its category on an absolute and risk-adjusted basis. The annual ongoing charge of the clean share class is currently among the most competitively priced within a group of similar share classes in its category. These positives form the basis of upgrading the strategy to a Morningstar Analyst Rating of Silver, having previously been rated Bronze.

 

 

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
Alger Small Cap Focus I US24.18 USD-0.99
AXA Global High Income Z Gross Acc223.30 GBP0.13
JPM Emerging Markets C Net Acc9.76 GBP-0.83
JPM Emerging Markets Equity A (acc) EUR19.75 EUR-0.23

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