Jonathan Miller: Welcome to the Morningstar Manager Check-up, where we start with the Majedie UK Equity fund. The portfolio’s structured into four different parts, each run by a different manager. There are three large-cap parts, each making up 30% of the fund, and one small-cap sleeve. Each manager’s given the freedom to run their part as they see fit. But the team’s macro assessment shapes their thinking and the managers look for stocks with the highest potential upside.
The consistency of returns across different market environments is impressive, particularly as this has been achieved with lower volatility than the market. The managers have manoeuvred the portfolio over different market environments, admirably navigating very challenging cycles.
However, this does bring in market-timing risk and could cause short-term weakness. Bringing this together, we have retained a Morningstar Analyst Rating of Bronze.
Next is the Artemis US Select fund managed by Cormac Weldon since inception in 2014. He was previously at Columbia Threadneedle where he built a strong track record and when he joined Artemis, brought the majority of his US equity team with him. This has seen continuity of the process which combines top-down views with bottom-up research. The portfolio is typically concentrated in a few sectors as part of the high conviction approach.
We currently see this through around two thirds of the fund invested in technology, consumer discretionary and healthcare. Although the fund is slightly behind the index since launch, we think investors who stay over the long haul will be well-served, and we’ve reaffirmed its Bronze Morningstar Analyst Rating.
Finally, on to an investment trust, TR Property (TRY) where we’ve kept our conviction, with a Morningstar Analyst Rating of Silver. The management team is led by Marcus Phayre-Mudge, who’s been involved in the trust for 20 years. They believe listed real estate markets aren't efficient and on the ground research looks to capitalise on this, in their European investment universe. Stocks are placed into 30 classifications to really reflect the basis of underlying earnings and also great importance is put into analysing the underlying assets of all holdings.
This helps give a see-through exposure of each position to individual sectors and markets. All told we hold the trust in very high regard and the inclusion of around 10% in UK physical property, provides a further point of differentiation from peers.
