Morningstar's Manager Check Up

REAFFIRMED RATINGS: Morningstar's Jonathan Miller explains why analysts positively rate First State Asia Focus, a Legg Mason bond fund and Capital Group New Perspective

Jonathan Miller 1 February, 2017 | 10:08AM
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Jonathan Miller: Welcome to the Morningstar Manager Check-Up where this week it's about some new funds we've recently added to our coverage. Starting with Capital Group New Perspective Fund which comes straight in at Gold. This fund was launched in October 2015, but it's U.S. sibling has built an impressive multi decade history. Our analyst team State side has been following this strategy for years. So, we've leveraged on their research for this fund.

The managers see growth across the globe and aim to profit from changes in global trade patterns. A number of individuals are involved in running sleeves of the portfolio which allows each person to play to his or her strengths. Managers have a history of turning to stay at a group all the way through to retirement. So, we also identify a sense of stability. Their proven ability and the fund's competitive pricing are further positives for us.

Next up is the First State Asia Focus Fund which is only launched in August 2015. But has a Gold rating. The manager Martin Lau stands out as a proven China and Asian investor across other funds he runs. For this Asia focus fund he's got the flexibility to invest 20% outside the Asia Pacific region. With around £70 million in assets and fairly competitive fees compared with peers. We see this as an attractive way to access Lau's skills. He's backed by a team of 17 analysts who apply tried and tested bottom up stock selection process, which looks for quality companies that deliver sustainable growth at attractive valuations. The consumption theme is evident in the portfolio with meaningful exposure to the IT and consumer sectors.

What you tend to see with Lau's approach is lower volatility than the index and resilience on the downside. We're confident this will stay true paving the way for long-term outperformance.

Finally, we have the Legg Mason Brandywine Global Opportunistic Bond Fund, managed by veteran investors Steve Smith and David Hoffman. This fund has been assigned a Morningstar analyst rating of Silver. Their philosophy disregards indices that are weighted according to the underlying issuer. Instead they identified high real yields and currencies in countries with strong or improving fundamentals. The focus here is on sovereign debt with some flexibility outside this area.

But given their process, their significant exposure to emerging markets and little in low yielding developed markets. The duo will also adjust their duration as the macro outlook shifts. This creates higher volatility than global bond peers. So, for patient investor who praise long-term returns over short term downside protection this fund is a compelling choice. 

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
Capital Group New Pers (LUX) Z21.82 USD0.04Rating
FSSA Asia Focus B GBP Acc237.65 GBP-0.62Rating
Legg Mason BW Glb Oppc FI A USD Dis(M)108.07 USD-0.60Rating

About Author

Jonathan Miller  is Director of Manager Research, Morningstar UK