Morningstar's Manager Check Up

REAFFIRMED RATINGS: Morningstar's David Holder explains why analysts positively rate JPMorgan US Equity Income, Templeton Emerging Markets and M&G Global Macro Bond

David Holder 19 July, 2017 | 11:48AM
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David Holder: Welcome to the Morningstar Manager Check-up where we take a look at three of our recent fund updates, for a whistle-stop tour around various global markets.

First up is the JPM U.S. Equity Income Fund, which aims to deliver a combination of capital growth and income and has many appealing features including a thoughtful investment approach, long-tenured manager and an established team. Manager, Clare Hart, has been at the helm since the inception of the U.K.-domiciled version of this strategy in December 2008 and has managed the U.S.-domiciled offering since August 2004.

She benefits from the support of two dedicated analysts to the dividend strategy and is also able to tap into the research of more than 25 analysts in JP Morgan's core and value teams. Hart's preference is for funds with consistent earnings, high returns on invested capital, durable franchises and strong management. Under Hart's tenure, the fund has delivered solid risk-adjusted returns and retains its Morningstar Analyst Rating of Silver.

Next to the bond and credit markets and the M&G Global Macro Bond Fund where manager Jim Leaviss is key to our positive view. Leaviss, M&G's Head of Retail Fixed Income, has managed this fund in its various iterations since inception in September 1999. He is close to two decades of experience managing strategies ranging from top-down focus global government bond mandates to bottom-up-biased corporate credit ones, which is valuable to this wide-ranging macro-driven fund.

We have a high opinion of his ability to formulate independent macroeconomic views and combine them with the wider team's bottom-up expertise which creates a portfolio of long-term valuation-driven themes, diversified across rates, credit, inflation and currency markets. The quality of the ideas and his active management of these risks have enabled Leaviss to add value across nearly all market segments which has resulted in a strong track record. Consequently, we retain its Morningstar Analyst Rating of Silver.

Finally, to global emerging markets and Templeton Emerging Markets Investment Trust. We recently reiterated our Neutral Rating but feel that there is significant positive change here in terms of investment approach and utilisation of the material and locally-situated analyst resource. Carlos von Hardenberg was appointed lead fund manager on the Trust in October 2015 and he is director of Frontier Market Strategies and a senior member of the Templeton Emerging Markets Group.

Historically, the portfolio has reflected a clear large-cap value bias with around 50 stock positions and relatively little attention paid to country or sector weights. Under von Hardenberg the number of positions has risen above 90 and there is a greater emphasis on achieving diversification to avoid unintended country and sector positions.

There's also been an introduction of an element of growth factors into the research process which is intended to better capture the prevalent economic dynamics that has previously been the case. It remains early days into von Hardenberg's tenure, but we feel that the reinvigorated approach holds much promise for investors and we await with interest developments over the forthcoming years.

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
JPM US Equity Income C Net Acc3.93 GBP-2.45Rating
M&G Global Macro Bond GBP A Inc81.29 GBP-0.53Rating
Templeton Emerging Mkts Invmt Tr TEMIT145.21 GBP-0.68Rating

About Author

David Holder  is a senior investment research analyst at Morningstar