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Morningstar Manager Check-up

VIDEO: Morningstar senior analyst Rajesh Yadav on why analysts rate multi-asset funds by BNY Mellon, ASI and Miton

Holly Black 25 September, 2019 | 11:08AM



Holly Black: Welcome to the Morningstar Manager Check-up. I'm Holly Black. With me in the studio is Rajesh Yadav. He is the senior analyst on the Morningstar Manager Research team.


Rajesh Yadav: Hello, Holly.

Black: So, you've got three funds to talk to us about today, and they're all multi-asset.

Yadav: Yes.

Black: What's the first one?

Yadav: The first one we would like to start is BNY Mellon Multi-Asset Balanced Fund, which has seen quite a bit of transition in its structure under the new manager, Simon Nichols, who took over from Matt Brown in late 2017, where he has been transitioning the portfolio to his philosophy of making it more a mainstream strategy, as per se, and moving away from the traditional approach of a real return focus, which was under Matt Brown's tenure.

Black: So, a new manager, new strategy, and it's been upgraded. So, you must feel quite confident with what's going on there.

Yadav: You're right. There are many moving parts to it, and he's fairly new. But to his credit he has been managing this strategy since 2013. So, he has been co-managing with Matt, plus he has been managing a similar strategy with a similar mandate elsewhere for much longer, where his track record has been really great. So, it gives us much confidence in that environment.

Black: Super. What's fund number two?

Yadav: The fund number two we're going to talk about is ASI MyFolio Market range, which is a flagship offering from Standard Life, now Aberdeen Standard Life Investments. This platform was launched back in 2011 under Bambos Hambi, who has been the face of the strategy for a long time. Here, investors benefit from its low cost, of course, plus a more structured investment process, which essentially has three pillars, as per se. First is long-term strategic asset allocation, which is vital for achieving long-term returns for investors. Second is a more dynamic tactical asset allocation. And finally, the fund selection benefit.

Black: And with the recent merger of Aberdeen and Standard Life has that kind of put that fund under review for you?

Yadav: Actually, no. I think the merger of Standard Life and Aberdeen has actually strengthened the infrastructure around this process and it has given them a more broader platform to market the portfolio. Plus, it has added senior management investment people on the strategic asset allocation, which is an added advantage.

Black: And MyFolio is a range of multi-asset funds that have different remits. So, does that make you more confident with the fund as well, because it has a whole sort of suite of products?

Yadav: True. It has three ranges. One is a passive range which is low cost, which we're talking about today. But there is also internal fund-of-fund and external fund-of-fund. Clearly, out of the three, the MyFolio Market range, which we are discussing today has been one of the most successful because of the low cost attractiveness for investors. And plus, it also benefits from the more dynamic management of portfolio itself. So, I think it has been the more flagship and more successful strategy within the portfolio.

Black: Super. So, what is our final fund?

Yadav: The final fund we will discuss is a Miton Cautious Multi Asset Fund, which we downgraded recently. The fund itself has a reasonably decent track record, I would say. But over time, its thematic approach has meant that it has swayed quite a bit from one theme to another theme and we ourselves couldn't get our head around how these themes have been formed, or how these themes have evolved over time. So, it gives us a bit – somewhat tempered confidence in the strategy.

Black: And this is another fund where there's a lot of change, senior management and also a merger and that must affect the outlook as well.

Yadav: You're right. I think there's a proposed merger from Premier and Miton. And as with any merger, it's always an uncertainty what will happen to the strategies. At this stage, the full scale of merger, we don't know. But it's fair to say that given Premier has quite a good offering within the multi-asset space in three options, which is single product, there's risk targeted and also fund-of-funds, there could be some changes we could see in something like this, which is a very plain vanilla multi-asset fund. So, we can't rule out some impact. And at that point, we may have to come back and review the strategy per se.

Black: Well, thank you so much for your time.

Yadav: Thank you, Holly.

Black: And thanks for joining us.

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.

About Author

Holly Black  is Senior Editor, Morningstar.co.uk

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