Jonathan Miller: Welcome to the Morningstar Manager Check-up for three fund updates from our research team.
Stewart Investors Indian Subcontinent Sustainability fund has seen Sashi Reddy and co-manager David Gait worked closely on the strategy since 2009.
The duo is part of the Sustainable investment team, which evaluates companies by focusing on quality, earnings growth, and valuation. In assessing quality, it focuses on three aspects: quality of management who act with integrity, quality of the franchise, and the quality of the financials. This leads them to invest across the Indian equity market with a concentrated portfolio of 30 to 40 holdings.
Thanks to the heavy quality focus, the fund has fared phenomenally well in bear markets. Overall, this fund remains a strong option, backed by a solid research team and a well-articulated and consistent process, fully meriting its Morningstar Analyst Rating of Silver.
Next, BlackRock European Dynamic has been managed by Alister Hibbert since March 2008. He’s supported by the European equities team, which consists of 21 managers and analysts. There’s a primarily bottom-up approach, aiming to unearth companies with medium- to long-term earnings power that’s significantly higher than the market and not factored into the share price.
However, Hibbert is flexible and will also look for restructuring and turnaround situations where appropriate. He does this taking into account top-down considerations. This is really a go-anywhere approach which brings its own risks and there’s also been some team turnover. But the fund continues to hold a lot of long-term merit, and it retains our Morningstar Analyst Rating of Silver.
Finally, the Legg Mason Brandywine Global Opportunistic Fixed Income Fund, where Steve Smith and David Hoffman have decades of experience running this strategy. They focus on sovereign debt, building a portfolio based on a search for high real yields and undervalued currencies, in countries with strong or improving fundamentals.
That has led to significant emerging-markets exposure and little exposure to low or even negative-yielding developed markets such as Japan and the eurozone. This unique style has led to volatile but very strong performance in the long run and patient investors have been well served. With a nod to its disciplined process applied through ups and downs and the experienced team, the fund retains its Morningstar Analyst Rating of Silver.
