Jonathan Miller: Welcome to the Morningstar Manager Check-up, where we’re starting with the Polar Capital Global Insurance fund. This is a niche offering that focuses on high-quality, non-life insurers. The manager, Nick Martin, believes the attractiveness of companies in this space is down to the discipline of management teams in writing business when rates are profitable and to deliver sustainable growth in book value. The strategy is long term in nature and has delivered a more stable performance profile than the broader financials peer group, by helping to protect capital better in falling markets.
Allied to that there’s the knowledge and experience in place, along with the role the fund can play as a diversifier in a wider portfolio; all of which we believe are compelling. As such the fund retains a Morningstar Analyst Rating of Silver.
Next up, Fidelity Emerging Markets that’s been run by Nick Price since 2010. He’s supported by a team of three regional portfolio managers along with more than 45 emerging market analysts based around the world. The team focuses on quality growth companies that have superior and sustainable return on assets, unleveraged balance sheets and reasonable valuations over a full economic cycle. Price is ultimately responsible for portfolio allocation and stock selection, favouring large-cap names given the significant assets under management in this strategy.
The portfolio shows clear biases to growth factors, which fell out of favour in 2016 so the fund underperformed. That’s not a surprise given its style, where we like the clear approach, strong resources and outperformance over the long term. So the fund’s Analyst Rating of Bronze has been reaffirmed.
Finally, the JPMorgan American investment trust (JAM) managed by the longstanding Garrett Fish, who has more than 25 years of investment experience. He draws upon two well-resourced teams for his stockpicking. On one side, the fundamental analysis team, where there’s a close eye on high quality growth stocks and their cash flow. Then on the other side, the behavioural finance unit where screenings such as earnings and price momentum are taken into account.
Fish brings the best ideas from these together to give an active share of around 70% and at times will also delve into small caps. We feel Fish harnesses the research output into a high quality, but valuation conscious portfolio. The trust has kept up with US equity index over the long term and it retains its Analyst Rating of Bronze.
