Morningstar's Manager Check Up

REAFFIRMED RATINGS: Morningstar's Jonathan Miller explains why analysts positively rate Newton Real Return, JPM Global Corporate Bond and Impax Environmental Markets

Jonathan Miller 11 October, 2017 | 9:31AM
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Jonathan Miller: Welcome to the Morningstar Manager Check-up for the latest updates from our research team.

The Newton Real Return fund has been managed by Iain Stewart since inception in April 2004. He’s among the most experienced multiasset managers in the UK, backed by another seven people in the team. They construct the portfolio based on Newton’s in-house thematic view of the world and macroeconomic outlook. These are the central pillars reflected in sector positioning and stock selection. Surrounding the equities exposure, bonds and cash are used as a defensive element, then there are also hedges in place to limit the downside.

The fund targets cash plus 4% annualised over five years, before fees. The consistency in meeting this, strength in depth of the team and execution of the approach, continue to earn the fund a Morningstar Analyst Rating of Silver.

JPM Global Corporate Bond has five named portfolio managers and is led by Lisa Coleman, the head of global credit, who’s been at the helm since the fund's inception in March 2009. The managers based in the United States handle the US credit portion, while those in London look after the European part. The wider fixed-income group shapes the portfolio's credit-risk stance and market tilt.

The managers then work closely with a team of 20 investment-grade credit analysts, who carry out fundamental analysis and are tasked with bottom-up idea generation. The fund carries a Morningstar Analyst Rating of Bronze as we believe this is a solid proposition, with a disciplined investment process and competitive fees.

When it comes to the environmental space, we like what Impax has to offer. If we focus on the Impax Environmental Markets fund, it benefits from a management duo of Bruce Jenkyn-Jones and Jon Forster who both have more than two decades’ experience in the area. We value their longevity, in-depth knowledge, and specialist understanding. They enjoy the support of a stable and well-resourced team of analysts.

The bottom-up process looks to growth companies where at least 50% of their business is derived from clean energy, water, waste recovery and agriculture. Then macroeconomic themes, along with analysis of regulatory regimes, help inform the allocation among regions and sectors. The team’s expertise in this niche space, and their established and well-thought out process, has served investors well. We believe the fund remains a solid proposition in the environmental sector for investors who understand its risks, and it retains 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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About Author

Jonathan Miller  is Director of Manager Research, Morningstar UK