Video: Three Newly-Rated Funds Explained


Ollie Smith: Morningstar’s fund research team keeps a regular tab on fund performance and strategy. Here to discuss three newly-rated strategies with me is manager research analyst, Bhavik Parekh.

Bhavik, thanks for joining me. What’s the first fund on the list and why does it deserve our attention?

Bhavik Parekh: Hello. The first fund that I wanted to talk about today is Fidelity Asian Values ​​Investment Trust. This trust has been managed by Nitin Bajaj since 2015, but he does manage another open-ended vehicle, and he has done that for a few years longer. So, he has a decent track record in this space.

We think that Nitin Bajaj is a good stock picker and the vast resources he has at Fidelity will help him in that goal of good stock picking. In terms of the process, he is fairly dogmatic in sticking to his mantra of finding companies that have good business models, good management and at a good valuation. And on that latter point, he is fairly risk averse when it comes to valuation. However, this risk aversion has served investors well as the standard deviation or volatility of the Trust has been lower than the benchmark over its tenure and returns have been above benchmark. So, risk-adjusted returns have been really strong.

YOU: Sure. And the second one on the list is Rathbone Income. Is that as dogmatic? What’s the approach?

BP: This fund is managed by Carl Stick, and he has actually been the manager for over 20 years. He is not dogmatic in the same way that Bajaj is. He is a little bit more flexible in his approach than him. The process is a fairly standard one for an income fund, but what we really like here is that Carl Stick has shown his strength in stock picking, and in general, the execution of his fund management has been very good. One thing that he has been able to do quite successfully is tilt the portfolio towards the areas of the market that he thinks will outperform. For example, in latter 2020, I have shifted the portfolio to have even more of a value bias and that has served investors well since, because the portfolio has performed quite strongly since then.

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YOU: Finally, then, we’ve got Janus Henderson European Focus. What’s noteworthy there?

BP: So, this fund has been managed by John Bennett for over 10 years now, but prior to that he had a wealth of experience within European Equities. Again, we think he is a good manager with good stock picking abilities. And the thing we like about this fund first of all is it’s a little bit contrarian but also doesn’t have too much of a growth bias unlike some of its peers in the Europe ex-UK equity category. Again, the process is fairly standard, but there is a repeatability aspect through it. His focus on cash flow metrics and again similar to Carl Stick, he will tilt the portfolio based on his macro views of him, and he has been fairly successful in being able to do that over the years as well.

YOU: Awesome. Bhavik, thank you so much. For regular insights into our fund upgrades and downgrades, look out for our Tuesday updates on Until next time, my thanks to Bhavik, I’ve been Ollie Smith for Morningstar.


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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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