Morningstar's Manager Check Up

REAFFIRMED RATINGS: Morningstar's Jonathan Miller explains how fund analysts rate JOHCM UK Growth, BlackRock Gold & General and Matthews Asia Dividend

Jonathan Miller 24 May, 2017 | 8:08AM
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Jonathan Miller: Welcome to the Morningstar manager check up where we start with the JOHCM UK Growth fund that Mark Costar has run since launch in late 2001. The manager focuses on finding undervalued, undiscovered, and mispriced growth opportunities. It’s a bottom-up approach, that requires thorough analysis of a company’s prospects, risks, and opportunities.

The portfolio is underweight mid-caps on valuation grounds, with new ideas being typically found in the large- and small-cap segments of the market. The unconstrained mandate, coupled with the often-contrarian positioning mean returns can deviate meaningfully from the index. This therefore requires patience, but we believe investors will be compensated over the long term, so the fund retains its Morningstar Analyst Rating of Silver.

Next up is the Blackrock Gold & General fund that Evy Hambro’s managed since April 2009, and who brings a wealth of experience to this specialist area. He’s proved that he’s a talented portfolio manager and is supported by a well-resourced team, with Tom Holl appointed as comanager a couple of years ago. The investment approach centres around the team’s detailed commodity and company research.

The valuation analysis is rigorous and his leads to an emphasis on large producers with the ability to grow their production in a relatively low-cost manner. Performance has been strong, with returns substantially ahead of the FTSE Gold Mines Index and strong stock-picking has been the main driver behind the fund’s outperformance. We see this fund as best in class in this space and it retains is Gold analyst rating.

Finally, the Matthews Asia, Asia Dividend fund. The managers Yu Zhang and Robert Horrocks have been at the helm since mid-2013. They focus on companies with clear dividend policies and commitments to growing their dividends.

We find a portfolio that’s different from the index in terms of country and sector weightings, and the duo also invests in small caps. Given the resilience of dividend payers, the fund moderates downside risks, while retaining upside potential. Taking a wider view, of this specialist Asia house, that’s actually based on the West Coast of the US, there’s a team of 38 on the investment side producing good results across a wide variety of offerings.

Although the clean share class is more expensive than peers, there’s strong execution of the process backed by a dedicated team, and the fund maintains its Morningstar analyst rating of 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.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
BlackRock Gold and General D Inc1,276.25 GBP-1.37Rating
JOHCM UK Growth GBP A Inc4.11 GBP-0.41Rating
Matthews Asia Dividend Fund I USD Acc24.23 USD-0.43Rating

About Author

Jonathan Miller  is Director of Manager Research, Morningstar UK

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