Jonathan Miller: Welcome to the Morningstar's Manager Check-up for our analyst's latest ratings updates. We start with the Neuberger Berman High Yield Bond Fund, where Tom O'Reilly leads a team of four co-managers. The process combines top down elements and security selection, while aiming to weed out bonds with a high chance of defaults. This means limiting downside risk is firmly on the agenda, with 30 analysts involved in analysing credits.
We also like the fact that incentives are aligned with investors' interests, and have up to 20% of manager's bonus goes into a fund they run, which is locked for three years. There's been a bit of a mishap performance-wise linked to energy exposure in the last couple of years, but we believe the team and the process remain very credible for exposure to high yield and we maintain our analyst rating of Silver.
Next up is the T. Rowe Price Continental European Equity Fund managed by Dean Tenerelli. He's been managing money in this space for over a decade, but this is a more recent launch focusing on Europe ex-U.K. Tenerelli is backed by a strong analyst team in his search for companies with high quality fundamentals, superior profitability across market cycles and durable cash flow profiles. This is very much a bottom up approach we are deviating from the index through significant sector and country place is common.
With a portfolio of around 50 holdings, exposure to mid-caps has generally been above 25%. That's double that of other manager in the category and way higher than 6% you see in the index. Holdings here in the Top 10 include Wirecard, Simcorp and Dufry, which are mix with the likes of Nestle, Roche and Novartis. There's also a strong risk-adjusted profile; meaning, we reaffirm our Bronze rating.
Finally, we have the Allianz China Equity Fund led by one of the most longstanding managers in the region, Christina Chung. She's an out and out stock picker with a highly concentrated portfolio. And every time her performance is mainly driven by stock selection. She looks for companies with secular growth prospects or unloved names with recovery potential. Company visits are crucial to get an in-depth understanding and these are covered between her and the dedicated six-member analyst team.
At our recent review meeting, she noted that the issue of nonperforming loans was easing and that's linked to a recovery of commodity prices. This has seen an increasing banking exposure over the last year, although it's still a slight underweight relative to the index. We continue to think highly of Chung and have proven investment process, so we maintain our analyst rating of Bronze.