Our Morningstar Award Winners Talk Risk, Truss and Greggs

VIDEO: Last week at the Morningstar Fund Awards for Investing Excellence, we handed out several gongs to funds deemed outstanding in their individual categories

Ollie Smith 28 March, 2023 | 2:16PM
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Ollie Smith: Charles Somers from Schroders has just picked up the prestigious category award for Best Global Equity Fund at the Morningstar Fund Awards for Investing Excellence. He joins me now.

Charles, congratulations. I'm intrigued. What does it take to run a good global equity fund at the moment?

Charles Somers: Well, I think the most important thing is to know your companies incredibly well. It's a time when there's a lot of uncertainty and our sustainable approach looks at companies from two points of view. The first, the sustainability. We're looking for companies essentially that are well run. What do we mean by that? It means they look after all their stakeholders in a responsible and balanced way and that kind of company has a much better chance of prospering in the difficult environment we find ourselves in.

OS: Can you give me an example from the portfolio?

CS: Yeah. I mean, there's some amazing examples. One that might ring a few bells around here is Greggs. Not the most obvious sustainable company, but when you delve into it and look across their stakeholder relationships, they are exemplary with their employees, with their suppliers, providing healthy food at an affordable price. They have refillable water stations for people with water bottles. They were one of the first to do that. They really look after all their stakeholders extremely well, and that's allowed them to prosper in pretty difficult times.

OS: Stake bake holders...

CS: Whatever works!

OS: Congratulations again. Thanks for your time.

CS: Thank you.


OS: Picking up the category award for Best GBP Bond was Invesco's Mike Matthews. He joins me now.

Mike, congratulations. I must ask what does it take to hold your nerve in a bond market at the moment?

Mike Matthews: Well, thank you. Obviously, it's nice to win an award. It's just tough to be winning it in such a bad year for bonds. I think what helps is being in the market for a long time. Over time you realize actually tough markets are often when you get your best opportunities. So, for active investors, I think going through tough markets, whether it's Asia crisis, TMT, autos, GFC, euros, they're often the good times to get the long-term investments.

OS: And does the nightmare of Liz Truss still seem like a bad dream? Or is it reality still?

MM: I think it's too early in the night to discuss that one.

OS: Thank you very much. Congratulations again.

MM: Thanks very much.


OS: Picking up this evening's category award for Best UK Equity Fund is Fidelity International's Marcel Stotzel, who joins me now.

Marcel, congratulations. What does it take to run a UK equity fund well in 2023?

Marcel Stotzel: Well, I think the same thing as it always takes, have a good process, have the patience to stick with that process, have a bit of luck. What we've seen so far in 2023, it's probably going to be a volatile year. So, we stick with our same process and philosophy, hoping for the best, but hopefully being positioned to withstand the worst.

OS: Can you tell me a little bit more about the process? How does that help you hold your nerve perhaps in the bad days?

MS: Sure. Yes. So, I think, we tend to invest with the time horizon of three to five years, focusing on companies that have consistently grown their dividends and are likely to continue to do so, and taking that long-term focus really helps to not only reduce transaction costs but remove ourselves a little bit from the day-to-day noise and hopefully, make better decisions for our clients, therefore.

OS: Marcel, thanks so much. Congratulations again. Thanks for your time.


OS: Picking up the category award for Best GBP Allocation is Ruffer Investment's Bertie Dannatt, who joins me now. Bertie, congratulations. What does it take to be a good fund manager in an environment perhaps mired with political risk at the moment?

Bertie Dannatt: I think it requires a relentless focus on what are the risks in capital markets and how can you offset those. And it is that focus on risk mitigation, which really defines Ruffer and has enabled us to not successfully navigate the current inflection in markets but also a number of previous ones too.

OS: Sure. So, in terms of risk then, what do you see as the biggest investment risk right now?

BD: I think undeniably it is inflation and this is a risk that Ruffer has been fixated on and been planning for the return of for a number of years. And therefore, we find ourselves well-prepared and well-positioned, hopefully, to continue to navigate for our investors through what is a very difficult and challenging macroeconomic environment.

OS: Bertie, thanks so much and congratulations again.

BD: Thank you.


OS: Picking up the category award for Best UK Equity Fund is Jupiter Asset Management's Dave Harris. Dave joins me now. Dave, congratulations. What is it that makes the UK an attractive place to invest in equities right now?

Dave Harris: Look, I think at Jupiter is a firm belief that the UK is pretty undervalued right now, a pretty attractive place to invest if you think about valuations. The UK is about as cheapest as it's been since the early 1990s versus global equities. You're also picking up good dividend yield in the UK, which is increasingly important when set against inflation, and I think the prospect of getting your money back today versus tomorrow, it's never been so important. And I guess if you think about the last decade for UK equities, it's been pretty challenging. If you've been underweight technology and overweight energy and financials, you've had a tough time. And with rising interest rate environment, we think that trend may very well reverse. We think there's really good prospects – despite performance last year, there's really good prospects moving forward into 2023.

OS: Dave, thanks so much. Congratulations again.

DH: You're welcome. Thanks so much, Ollie.

OS: Cheers.

DH: Thank you.

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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Ollie Smith

Ollie Smith  is editor of Morningstar UK

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