Morningstar's Manager Check-Up

REAFFIRMED RATINGS: Why Morningstar fund analysts positively rate funds by Schroder, Threadneedle and Artemis

Jonathan Miller 8 May, 2019 | 10:06AM
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Jonathan Miller: Welcome to the Morningstar Manager Check-Up for the three fund updates from our research team.

First up is Schroder Recovery, which has seen Nick Kirrage and Kevin Murphy demonstrate a strong working relationship since taking on the fund in 2006. Their process looks to identify companies that are trading at significant discounts to their perceived fair values and starts with a number of valuation screens. This reduces the universe from where more detailed research is undertaken. With investments driven by the best value opportunities, deviations at the sector and market-cap level can be sizeable. For example banks and mining stocks are currently some of the key overweight positions. This means it can be a rocky ride, but the resolute adherence to the strategy has seen strong long-term rewards. Our conviction remains high in the managers' ability to continue to add value meaning the fund retains its Morningstar Analyst Rating of Silver.

Next, is Threadneedle UK Equity Income, where Richard Colwell has been heavily involved for nearly a decade and became lead decision maker in 2012. He’s got a broad team around him, so overall we feel he’s well-supported. The fund is managed with a balanced approach to both income and growth. Holdings tend to fall into two broad categories: cash flow compounders with a consistently high return on common equity and more contrarian ideas where established companies are experiencing short-term difficulties. This gives the flexibility to invest across growth and value situations. This pragmatic thinking with a long-term view has served investors well over time, providing strong risk adjusted performance. The combination of manager experience and pragmatism, together with support from a well-resourced team, result in a Morningstar Analyst Rating of Silver.

Finally, Artemis US Select, which has been managed by Cormac Weldon since inception in 2014. He was previously at Columbia Threadneedle where he built a strong track record and when he joined Artemis, brought the majority of his US equity team with him. This has seen continuity of the process which combines top-down views with bottom-up research. The result is a general leaning towards growth companies. But, the likes of Amazon, Netflix and Google, which have helped drive markets, haven’t been held. The fund is slightly behind the growth index since launch but ahead of peers and overall, we think investors who stay the course over the long haul will be well-served, and we’ve reaffirmed 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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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Artemis US Select I Acc GBP4.15 GBP0.73Rating
CT UK Equity Income Z Acc GBP2.55 GBP-0.05Rating
Schroder Recovery Z Acc1.55 GBP0.59Rating

About Author

Jonathan Miller  is Director of Manager Research, Morningstar UK

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