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Morningstar's Manager Check-Up

REAFFIRMED RATINGS: Why Morningstar fund analysts positively rate funds by First State, Janus Henderson and Templeton

Jonathan Miller 10 April, 2019 | 9:04AM

 

 

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

First State Greater China Growth has been led by Marin Lau since launch in 2003. He’s got nearly 25 years of investment experience and we see him as one of the leading names in the region. This is an all-cap strategy with a relatively concentrated portfolio of 55-60 names. The team steadily applies a tried and-tested bottom-up stock-selection process that looks for quality companies delivering sustainable growth at attractive valuations. The trademarks of the approach are its absolute return focus, low portfolio turnover, and the fact it takes little account of the index make-up. Adding to its appeal is the fact that it’s one of the most downside-resilient funds in the category and its fees are attractively priced. These strong attributes all help make this a stand-out option, so the fund maintains its Morningstar Analyst Rating of Gold.

Next up, we have Janus Henderson European Focus which is managed by John Bennett and he has over 25 years’ experience in running European equity portfolios. His approach combines macro and microeconomic research, which we see as robust and disciplined in nature. Bennett has proved adept at steering the portfolio in line with his macroeconomic views over the years, but the fundamental stock research is also a key input. There’s been quite a bit of turnover in the analyst bank over the last couple of years which has given us some concern amid the importance of team dynamics. The new members still need to bed down, but with the consistent application of the investment approach over multiple market cycles, the fund retains its Morningstar Analyst Rating of Bronze.

Finally, the Templeton Emerging Market Smaller Companies fund has had Chetan Sehgal as lead manager since 2017, but he’s been involved day-to-day since launch in 2007. There’s been some team changes over the years which has seen some workload strains, but Sehgal has always impressed us during meetings. He uses a bottom-up process that aims to identify small-cap companies that appear cheap relative to their five-year projected earnings growth. Analysts work on researching industries and carry out valuation analysis. From there they create a preferred list, from which the manager chooses stocks. We feel the strengths here lie in the experienced, impressive, and proven investment team, which help support the 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.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
First State Greater China Gr B Acc GBP999.92 GBP0.71
Janus Henderson European Gr I Acc528.71 GBP0.52
Templeton Em Mkts Smlr Coms W(acc)GBP20.01 GBP0.76

About Author

Jonathan Miller  is Director of Manager Research, Morningstar UK

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