Jonathan Miller: Welcome to the Morningstar Manager Check-up for the latest updates from our fund research team.
The Fidelity European fund’s been managed by Sam Morse since the end of 2009. But he actually started managing money in 1994 using a similar approach to the one he employs here. Morse focuses on bottom-up analysis, where dividend growth is key to the process. He sees dividends as an indicator of a company's ability to grow in a sustainable manner. He looks to hold high quality names over the medium to long term, defining quality as growth that can be translated into a cash return to shareholders.
This leads to high-conviction stock bets, but, sector positioning is actually reasonably close to the index. So, performance is predominantly derived from stock selection, which has for the most part been strong over his tenure. The fund tends to protect capital better than peers in weaker markets and with the backing of a well-resourced team, the fund has a Morningstar Analyst Rating of Bronze.
John Pattullo has managed the Henderson Strategic Bond fund since launch in 1999, with the co-manager Jenna Barnard involved since 2004. They employ a flexible and unconstrained strategy. Over time we’ve generally seen a bias to corporate bonds, but they mainly look to add value from asset allocation. So, their macro assessment is a key influence.
In our opinion the duo has demonstrated an aptitude for analysing the economic cycle and positioned the portfolio accordingly. It’s worth noting that at times there’s been aggressive allocations to high yield and financials, so this fund can be volatile. That said, the long-term risk-adjusted performance is strong. We believe that with the team in place, following the same flexible approach, the fund can continue to do deliver, so it retains its Morningstar Analyst Rating of Silver.
Veritas Asian has been managed by Ezra Sun since inception, and he’s got more than 20 years of Asia equities experience. He’s then supported by three analysts. The fund combines a thematic approach
with bottom-up stock selection. There’s two broad sleeves in the fund; core and trading. The core part consists of steadier, often high dividend-yielding companies, that tend to reflect a structural growth theme. What we see is a three-to five-year holding period for this type of stock. The remainder is invested in shorter-term trading opportunities. They seek to capitalise on market inefficiencies and earnings momentum, with Sun using a variety of valuation metrics to determine appropriate entry and exit prices. With Sun demonstrating long-term success, using a consistent investment philosophy, the fund has a Morningstar Analyst Rating of Silver.
