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Morningstar's Manager Check-Up

REAFFIRMED RATINGS: Why Morningstar fund analysts positively rate JPMorgan Asean, Troy Trojan Income and Candriam Biotechnology

Jonathan Miller 21 November, 2018 | 1:55PM

 

 

Jonathan Miller: Welcome to the Morningstar Manager Check-up for three fund updates from our analyst team.

The JPMorgan Asean fund has been run by Pauline Ng since its launch in October 2010. She’s supported by a stable and well-resourced five-member ASEAN team with 12 years of investment experience on average. They can also draw on the wider 100-plus analyst bank covering emerging-markets and Asia-Pacific. The fund employs a proven, quality-focused investment approach that combines top-down views with bottom-up analysis. While stock selection generates most of the alpha, we think that the incorporation of country views is a sensible way of investing in ASEAN markets, as countries tend to exhibit idiosyncratic risks.

Since the fund's inception, it has delivered excellent returns, comfortably beating its benchmark and peers. Overall, an experienced lead manager, a well-resourced supporting team, a proven investment process that has yielded excellent long-term returns, and a cheap fee have led us to maintain the fund's Morningstar Analyst Rating at Silver.

The Troy Trojan Income fund has been managed by Francis Brooke since launch in 2004. Brooke constructs a relatively concentrated portfolio of “quality” companies that must meet strict criteria before being considered for investment. The focus is on FTSE 350 names, and Brooke tends to maintain a far greater weighting in large caps than the category average. The focus on quality at the stock level also results in some clear biases at the sector level.

This means the return profile tends to see underperformance in sharp rallies, but the fund holds its own in tougher markets, such as those we’ve been experiencing lately. What you’ve seen over the long term, however, is that this is one of the most attractive funds in the sector on a risk/reward basis. With a seasoned manager who has consistently applied a well-defined, conservative, low-turnover approach, the fund retains a Morningstar Analyst Rating at Silver.

The Candriam Biotechnology fund has been run by Rudi Van Den Eynde since launch in 2000. He works with a small team in this specialist field, where qualitative in-depth research and a deep understanding of clinical data are the core of this well-designed process. The analysis starts with a preliminary screening to study themes and trends within the biotech sector.

The analysis is primarily bottom-up-focused and the team constructs a well-diversified portfolio, which consists of large-cap stable growers combined with a tail of smaller bets on riskier industry innovators. The fund's track record has put it among the top quartile of its Morningstar Category over three, five, 10, and 15 years. As we have a high conviction in the team members, the manager’s deep knowledge of the space and their execution of a well-structured process, the fund deserves its Morningstar Analyst Rating of 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.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Candriam Eqs L Biotech R USD Cap196.09 USD-2.12
JPM ASEAN Equity C (acc) USD167.82 USD0.51
Troy Trojan Income O Acc356.32 GBP0.40

About Author

Jonathan Miller  is Director of Manager Research, Morningstar UK

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