Jonathan Miller: Welcome to the Morningstar manager check-up, for ratings updates from our analyst team. We start with the BNY Mellon Long-Term Global Equity fund, that’s managed by a team at the Walter Scott boutique, which is part of the BNY Mellon stable. What particularly stands out for us is the long tenure of people at the firm, the benchmark unaware approach and remarkably low stock turnover of 10 to 15%.
The process seeks out companies with long term growth prospects and solid balance sheets, which we see in the portfolio’s financial metrics. It’s large cap in nature but with little commonality with the global growth index. It’s only through our qualitative assessment that you really get the sense of how the people, process and culture come together. All this makes us believe investors are well served here and we reaffirm our Silver analyst rating.
Next up is a fund that saw some change in the not too distant past, and that’s Threadneedle American. It’s now three years since Nadia Grant’s been at the helm of the £2 billion portfolio and she uses a combination of bottom up stock selection with a trends and themes overlay. Valuation is at the heart of the process and in what we observe as a growth style, there’s also a large cap bias. This sees technology as an overweight through holdings such as Apple, Amazon and Microsoft. While the cyclical recovery is played through the likes of JP Morgan and Southwest airlines. During Grant’s tenure, the fund has outperformed the peer group but is behind the index, in what’s a tough area to outperform and we maintain our analyst rating of Neutral.
Finally the CF Miton Cautious Multi Asset fund whose management duo of David Jane and Antony Rayner have been in place since June 2014. A relatively short space of time but we’ve seen the process in place on previous funds Jane managed and we like the capital preservation mindset here. The macro-driven approach invests across equities and bonds. Last year, there was a change in the portfolio’s dominant theme of lower for longer, and on to a reflationary view.
What we’ve seen at work is their sensitivity to valuations; cyclical stocks have been added and in fixed income the main move has been a shift away from longer dated government bonds, towards short-maturity overseas corporates. The fund’s also been meeting its target of returning 4 to 6% on an annualised basis with half the volatility of UK equities. We remain positive on this fund, with our analyst rating of Bronze.
