Jonathan Miller: Welcome to the Morningstar Manager Check-up, for the latest ratings updates from our fund research team. We start with Troy Trojan Income, run by Francis Brooke since launch in 2004. The portfolio is relatively concentrated with what Brooke deems as quality companies that have to meet strict criteria.
They need to have low cyclicality of earnings, high return on equity, low debt, and good margins for typically over 10 years. The emphasis is on FTSE 350 names, and there tends to maintain a far greater weighting in large caps than the category average.
We believe the team is well-resourced given its area of focus and the fund benefits from a well-defined approach that’s been consistently applied. What’s more, the dividend distribution has risen each year and the fund maintains its Analyst Rating of Silver.
Next, we move into emerging markets, in the form of the Schroder ISF China Opportunities fund managed by Louisa Lo since 2013. She’s been in this space for over 20 years and is supported by a deep team of 14 analysts. She uses a disciplined stock-selection process that focuses on growth and valuation, favouring companies that are able to generate high returns on invested capital.
We hold the analyst team in high regard and their recommendations are key for stocks making it in the portfolio. Overall, we continue to have strong conviction in Lo, the deep research bench, and a proven investment process. We therefore reaffirm the fund’s Analyst Rating of Silver.
Finally, we’re going global, through the Rathbone Global Opportunities fund, where James Thomson has been involved since 2001. Thomson looks for easy-to-understand businesses with strong growth potential that aren’t sensitive to macroeconomic factors. He also uses an extensive network of sell-side analysts for idea generation, but then carries out his own research and meets management before investing.
The search for superior earnings growth also tends to result in a bias to mid-cap companies. Thomson tries to temper this from a risk perspective, by investing in a defensive bucket of steadier and lower-growth prospects. We continue to consider this fund a great option for investors seeking a global equity fund with a high-growth, all-cap profile. It’s backed by a competitive fee and retains its Morningstar Analyst Rating of Silver.
