Morningstar's Manager Check Up

REAFFIRMED RATINGS: Morningstar's Jon Miller explains why analysts positively rate Veritas Global Focus, Baring Europe Select Trust and Old Mutual UK Alpha 

Jonathan Miller 6 July, 2017 | 12:19PM
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Jonathan Miller: Welcome to the Morningstar Manager Check-up where we cover the latest fund updates from our research team.

We start with the Veritas Global Focus fund where the duo of Charles Richardson and Andrew Headley employ a thematic framework. This helps them identify global industries they believe will benefit from long-term structural drivers. At the company level, they then search for those with durable competitive advantages and sustainable cash flows.

The portfolio is managed with little regard to an index, and it’s actually capital preservation and growth that are deemed as most important. This has helped drive the fund’s strong returns in a variety of market conditions. For investors seeking global equity exposure with the aim of growing the real value of their investment through time, this remains one of our highest conviction funds in its sector and it maintains its analyst rating of Gold.

Next is the Baring Europe Select Trust where Nick Williams has over a decade at the helm. He targets companies with unrecognised growth opportunities that have low gearing, high return on equity and high historical earnings. Company visits are then key to assess management. Williams trims positions back to their purchase level after a 40% rise.

Then the sell discipline sees a stock reviewed if it falls 10% from its purchase price, and a 20% fall typically results in a sale. Williams has executed his process well over the years and has shown he has what it takes to navigate both up and down markets. We’re confident the fund can outperform over the long term and we affirm its Morningstar Analyst Rating of Silver.

Finally Old Mutual UK Alpha run by Richard Buxton. Buxton joined Old Mutual Global Investors from Schroders in 2013 and is a seasoned manager with over 30 years investment experience. He’s built a strong reputation involving a long-term approach to identifying undervalued firms, often incorporating a contrarian angle to his stock selection.

Buxton uses a process that’s established and proven, combining stock-level analysis with top-down insights. What I need to mention here is Buxton also took on the role of CEO a couple of years ago. This means there’s extra reliance on other team members, but we take comfort from the fact they’ve worked together for around 10 years, and we’ve maintained the fund’s analyst rating at Silver.

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
Barings Europe Select I GBP Inc48.54 GBP-0.85Rating
Veritas Global Focus A GBP59.71 GBP0.35Rating

About Author

Jonathan Miller  is Director of Manager Research, Morningstar UK