3 Funds to Weather the Uncertainty

Silver-rated multi-asset investor John Chatfeild-Roberts picks three funds for long-term investors to ride out the market uncertainty

Emma Wall 6 July, 2016 | 12:16PM
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Emma Wall: Hello and welcome to Morningstar. I am Emma Wall and I am joined today by John Chatfeild-Roberts, Manager of the Jupiter Merlin suite of funds to give his three fund picks.

Hello, John.

John Chatfeild-Roberts: Good morning, Emma.

Wall: So what's the first fund you'd like to highlight today?

Chatfeild-Roberts: I'd like to talk about James Findlay's Findlay Park American Fund. At which I have mentioned before, about a year ago, on the same series. James is a man who I have known for many years. He has been managing American money since the mid-1980s. He set up his own firm in 1998. The fund is called Findlay Park American.

It is based on the Warren Buffet style of investing. And if you look at his track record over many, many years he has completely outstripped the Standard & Poor's 500 Index, which most investors say it is the hardest one to beat.

Wall: And I think the fact that you are mentioning a manager that have picked in the past is both indicative of the style for Jupiter Merlin that you are long-term investors, but also of the market cycle that we are in, isn't it?

Chatfeild-Roberts: Well, James is an investor I think for all weathers. He is a value investor. He modeled himself on Benjamin Graham/Warren Buffett many years ago. And yes, I really do think in the current circumstances he is an excellent choice.

Wall: And what's the second fund you'd like to highlight today?

Chatfeild-Roberts: Well, it is another one that I mentioned before. This one is managed by Terry Smith, it is called Fundsmith Equity. It is a global fund rather than American fund, although it has got about half its assets in America. It is investing in generally speaking large, but not always large companies that have recurring revenues, solid balance sheets and a very positive cash flows. And it is being going five years now Terry Smith is a very able man, he has got an able team behind. And I think you could do a lot worse and don't pick his fund.

Wall: And one fund actually that fund is highly rated here at Morningstar as well. That sort of buy and hold philosophy that focuses very much on cash flow?

Chatfeild-Roberts: Absolutely. I think if you look at his portfolio turnover i.e. the buys and sells within his fund over the last five years it is in low-single digits, less than 5% I think.

Wall: And what's the third and final fund?

Chatfeild-Roberts: Well, I thought we'd go for bond fund this time. And I work at Jupiter, as obviously you know, and we do have a very, very talented manager by the name of Ariel Bezalel, who has been running his Jupiter Strategic Bond Fund since 2008. In fact, as a team, Jupiter Merlin we exceeded that fund back then. It has a very, very strong track record. He has got an excellent team behind him.

The bond at markets are very tricky to navigate, particularly with government bonds and being really quite expensive. And you know you can – literally there are bonds where a company goes west and you do not get the money back. You've got a very good pair of hands in Ariel.

Wall: And key there is the name strategic in the fund because that means that he has the freedom to pull many levers across the fixed income market, doesn't it? Including holding cash and going right out from government bonds over way up to high yield?

Chatfeild-Roberts: Well, he could, for instance, have a portfolio full of high yield bonds. Currently, actually, he has got 30% in government bonds, mostly Australians and it is that flexibility that not only does he have but he has used many funds with the term strategic on the tin, don't necessarily use that flexibility but he has been very, very I think the word perhaps might be agile.

Wall: John, thank you very much.

Chatfeild-Roberts: Emma, thank you.

Wall: This is Emma Wall for Morningstar. Thank you for watching.

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.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Findlay Park American USD186.96 USD-0.22Rating
Fundsmith Equity R Acc5.85 GBP0.20Rating
Jupiter Merlin Balanced Portfolio L Acc235.11 GBP0.84Rating
Jupiter Strategic Bond L Acc109.82 GBP-0.17Rating

About Author

Emma Wall  is former Senior International Editor for Morningstar