Jonathan Miller: Welcome to the Morningstar Manager Check-up, for three fund updates from our analyst team.
Charlie Thomas has been at the helm of the Jupiter Ecology fund since September 2003. He’s got 21 years of investment experience in the environmental sector, giving him an in-depth knowledge of the industry. He draws on the knowledge of the sustainable investment research and corporate governance teams to ensure the fund complies with its ethical and environmental objectives.
Stocks are identified through a bottom-up approach with a thematic overlay that aims to identify companies that have the potential to generate sustainable profits and benefit from long-term environmental drivers. Namely, infrastructure, resource efficiency, and demographics.
This is a global fund with 40% in the US, around 14% in Japan and 11% in the UK. It’s also been skewed towards mid and small-cap names and has typically been more resilient than peers in its ecology sector. With an experienced environmental manager and an established investment process the fund retains its Morningstar Analyst Rating of Bronze.
The M&G Global Macro Bond fund is managed by Jim Leaviss, who has over 20 years’ experience managing bond funds. We have a high opinion of his ability to formulate independent macroeconomic views and combine them with the wider team's bottom-up expertise. This is a "go-anywhere" strategy across global fixed-income and currency markets. Leaviss has used this flexibility well to create a portfolio of long-term, valuation-driven themes diversified across rates, credit, inflation, and currency markets, while actively trading around them based on his view of short term market technicals.
The quality of the ideas and his active management of these risks have enabled Leaviss to add value across nearly all market segments. His deep and diverse experience, ability to integrate the team's best ideas, and his consistent track record see the fund keep its Morningstar Analyst Rating of Silver.
Martin Cholwill has been at the helm of the Royal London UK Equity Income fund since March 2005. He has more than 30 years' experience and we believe his strategy is sensible for delivering yield and competitive total returns for investors. He targets companies with strong free cash flows that provide the opportunity for rising dividend pay-outs. So, company finances must be strong and cash flows sustainable.
He also seeks to ensure he's not paying a hefty valuation to secure income for the fund. The yield focus also guides his sell discipline, as stocks that have performed well become less attractive from a yield perspective. With a 40-60 stock portfolio he has some holdings in the FTSE 100 but his focus is on going into mid-caps to find the potential to deliver sustainable dividend growth. Performance during Cholwill's tenure has been strong and with a sensible strategy, we reaffirm the fund’s Silver Analyst Rating.
