Jonathan Miller: Welcome to the Morningstar manager check-up, where we update you on the latest ratings from our fund research team. First up is the Dodge & Cox Worldwide Global Stock fund which maintains its Morningstar analyst rating of Gold.
There’s something of a rarity here in that across our five qualitative research pillars of price, process, people, parent and performance, there’s a positive for each one. From a parent company that’s rolled out just five funds since 1931, to managers investing heavily in the funds and low fees compared with peers, we believe investors’ interests are firmly aligned.
The eight-person team who run the fund have been at the firm for an average of over 20 years and with their value tilt they’re not afraid to invest in out-of-favour stocks. This can hold them back in the short term, but we believe that the number of compelling factors for repeatability in future outperformance, really stand out.
Next, is the Invesco Perpetual Asian fund which has a Bronze Rating from Morningstar analysts.
The fund benefits from one of the most experienced managers covering the region in Stuart Parks, who’s specialised in Asian markets since 1990. Since April 2015, he’s been supported by comanager William Lam. The process relies on Parks’s top down views which set the scene for where the team focuses at a country and sector level, with Lam responsible for stock selection. Although there’s no particular style bias, there’s been a tendency to favour steady large-cap franchises which are market leaders in their field. What we’ve generally seen over time in terms of country exposure is an overweight to Hong Kong, while there’s also been a long-standing underweighting to Australia because of lower growth prospects.
Finally, we turn to an investment trust, Edinburgh Worldwide which maintains its analyst rating of Bronze. This is managed by a team of six at Baillie Gifford who are looking for up and comping global companies, industry disruptors and new participants likely to impact large players. This is therefore a global small and mid-cap offering. And so you get a further insight into where they’re investing, some 30% of the portfolio's exposure is in companies that aren’t yet making a profit.
There’s also 20% in biotech. The focus on nascent companies in volatile sectors, means there’s a need to stomach a rough ride from time to time. But overall this is a pretty unique approach, backed by a patient bottom-up team, whose idea generation has also been leveraged to positive effect in other Baillie Gifford funds.
