New Ratings
JPM Asia Growth – Bronze
Mark Laidlaw
We have initiated coverage on JPM Asia Growth with a Morningstar Analyst Rating of Bronze. The strategy benefits from an experienced pair of portfolio managers in the shape of Joanna Kwok and Mark Davids.
Kwok is best known through her management of Bronze rated JPM Eastern Companies, although she’s been managing large-cap Asian equity strategies for close to a decade. Co-portfolio manager Davids has been at the firm for over 20 years and also serves as co-head of the Asia-pacific regional team. We like that the pair dovetails nicely with each from a style perspective – Davids tends to have an earnings, momentum bias, whilst Kwok focuses more on the quality of the underlying businesses over the long-term.
The process tends to favour quality/growth names, firms with quality franchises that can point to consistent earnings and enjoy solid returns on equity. The track-record here is limited thus far, the UK OEIC has the longest track-record from April 2015, but promising thus far against both peers and the MSCI AC Asia ex Japan index. A competitive fee adds to the overall appeal. All up, JPM Asia Growth holds its own within a crowded universe.
T.Rowe Price Global Technology Equity – Silver
Mathieu Caquineau
T. Rowe Price Global Technology Equity is a strong offering managed by Joshua Spencer. Spencer has run the U.S. version of the strategy since June 2012, but he has been with T. Rowe Price and supporting the strategy as an analyst since 2004. He is backed by the firm’s considerable resources in technology. The team comprises 24 members, including 15 analysts with more than 10 years’ experience.
Such analytical breadth allows Spencer to put his convictions on full display and run a very focused portfolio. Although not yet through an entire market cycle, Spencer has extended an impressive run of peer-beating performance. Volatility is usually high, but, even on a risk-adjusted basis, the strategy has distanced its rivals and the MSCI ACWI/Information Technology Index over time.
Downgrades
Montanaro European Smaller Companies – Bronze
Montanaro European Smaller Companies Ord – Bronze
Samuel Meakin
The broad investment philosophy here remains unchanged, but there have at times over the recent past been tweaks to the investment process and its implementation in the portfolio. We have yet to see strong medium-term relative returns coming through following these.
While the house style has faced headwinds at certain times over this period, such as in 2013, we note that some competitor quality-growth strategies have fared better. Although we retain a positive view, our conviction in the relative merits of the process is therefore slightly lower than it has been in the past.
