Jonathan Miller: Welcome to the latest Morningstar Manager Check-up for our latest fund updates.
The Pyrford Global Total Return fund has an impressively stable team. Tony Cousins has been with the group for 29 years and leads an investment team where the three regional heads average more than 15 years’ tenure at the firm. They come together to implement a multi asset strategy that’s conservative and emphasises downside protection. Long-term value-based metrics are employed on four return drivers: asset allocation, fixed-interest duration, currency positioning, and stock selection. They will only invest in sovereign bonds that are rated AA or higher and global equities in countries that meet its stability criteria.
The team’s long-term thinking has produced good capital-allocation decisions over multiple decades and has met its objective of providing stable real returns. With a sound process and long-tenured team, this fund ticks many of the boxes we look for in a global multi-asset manager, and the fund continues to earn a Morningstar Analyst Rating of Silver.
The Kames Ethical Cautious Managed fund invests in UK equities and bonds, applying strict ethical criteria. Audrey Ryan runs the equity part and Iain Buckle looks after the fixed income portion of the portfolio. The process includes both top-down and bottom-up input. However, the strict ethical screening dominates the overall positioning of the portfolio, and generally leads it to looking very different from unrestricted peers in the GBP moderate allocation Morningstar Category. For example, the screening removes 40% of FTSE 100s stocks, resulting in a small and mid-cap bias.
On the fixed-income side, the exclusion of gilts is a significant differentiator. This can cause performance divergence relative to the peer group, but the long term-track record is strong and fees are competitive, so we’ve reaffirmed the Morningstar Analyst Rating of Bronze.
The T Rowe Price Global High Yield Bond fund has had Mark Vaselkiv lead the strategy since 1996. This started with an offering for US investors, then subsequently this Ucits version became available. Vaselkiv and his team marry rigorous bottom-up credit selection with topdown macro analysis.
There is also an opportunistic approach, where the fund’s credit quality profile can be adjusted, significant sector over- and underweights, plus adding out-of-benchmark securities, when attractive valuations are found. In this regard, they’re ultimately looking for issuers that are primed for a turnaround.
The team is experienced and has shown a knack for credit and sector selection. With a substantial team, effective process, strong returns and cheap fees, the fund maintains its Morningstar Analyst Rating of Gold.
