Amaya Assan, Square Mile senior investment research analyst, said: “We have decided to suspend the AAA rating on the Stewart Investors Global Emerging Markets Leaders fund. We have a high regard for the lead manager, Jonathan Asante… Although we are very familiar with the overall team and Mr Prew, who has been involved in the strategy for some years, we want some time to meet Mr Swarup as he joined the group relatively recently in 2014. We are therefore suspending the rating pending a full review with the new manager. Given the lengthy handover period which has been announced, we have no imminent concerns for the holders of the fund, but are keen to meet the new manager in order to form a longer-term opinion.”
Adrian Lowcock, head of investing, AXA Wealth, says investors shouldn’t be too concerned about the departures, saying that the transition had been ‘well-managed’ and he expects it to run smoothly: “The First State business was restructured in the summer which has helped to re-energise the team,“ he adds. “Stewart Investors has a very distinctive investment style with a conservative long term focus on businesses able to ride through the volatility that comes with investing in Asian markets. This approach has not been successfully replicated by their competitors.”
Aberdeen appeared to have a similarly successful franchise in emerging markets a few years ago, but recent performance has been disappointing. The focus from markets on quality companies in recent years has undoubtedly suited the Stewart Investors’ style, but even with that tailwind, its consistency is unparalleled in the sector.
If the team cannot replicate the performance they have seen under Tulloch’s guidance, it will be a loss to emerging market equity investors. Investors will now have to see whether Tulloch is as effective a team-builder as he is a fund manager.
