S&P Capital IQ Fund Research assigns Gold gradings to four Capital International funds
S&P Capital IQ Fund Research has assigned Gold gradings to four Capital International funds – US Growth & Income, Global Growth & Income, European Growth & Income, and Euro Bond.
Capital International is a privately owned asset manager that specialises in fundamentals-based investing.
It employs a multi-manager approach for all its portfolios, selecting a mix of in-house managers, with differing investment styles. It believes its unique approach can create portfolios with an optimum combination of high-conviction holdings and diversification, the success of which does not rely on any one individual. The managers work closely with Capital's risk team to ensure that there is a sufficient level of diversification.
US Growth & Income is a US equities fund run by Donald O'Neal, Ross Sappenfield and Eric Richter. It aims to outperform the S&P 500 over the long term while providing an above-average dividend yield and with an emphasis on capital preservation. This fund is formed by three high-conviction sub-portfolios, independently created by the three managers. Each manager is free to follow their own investment style; O'Neal takes a barbell approach, Richter is more of a pure value investor, while Sappenfield has a growth at a reasonable price orientation.
Global Growth & Income is managed by Jody Jonsson, Gregg Ireland, Andrew Suzman and Isabelle de Wismes. The fund aims to outperform the MSCI World over the long term, while providing an above-average dividend yield.
“The fund is ranked within the top quintile since launch cumulatively, all of which has come under the three incumbent managers. This, together with the experience of the managers and good use of significant analytical resources, underpins the S&P Capital IQ Gold grading,” says Peter Brunt, analyst at S&P Capital IQ Fund Research.
The three European Growth & Income fund portfolio managers, Mark Denning, Jesper Lyckeus and Alfonso Barroso, focus primarily on established companies that offer an above-average dividend yield, and each manager employs different approaches to stock selection and portfolio construction. The fund aims to beat the MSCI Europe over the long term through bottom-up stock selection. Each manager runs a concentrated sub-fund, and as a result, deviations from the benchmark can be large at the stock and sector levels.
“The track record achieved by the current team, its experience and the backing of group resources are sufficient to allow an S&P Capital IQ Gold grading,” says Simon Dorricott, Analyst at S&P Capital IQ Fund Research.
Lastly, the Euro Bond fund invests primarily in euro-denominated investment grade government and corporate bonds. It aims to outperform the Citigroup EuroBIG Total Return index by 50-100bps a year gross of fees over rolling three to five year periods and has a particular focus on capital preservation. The fund is run by Mark Brett, Thomas Høgh and Kevin Adams. The team has remained extremely stable, with each member managing their segment of the fund since launch in 2003.
Over the past three and five years to end-September 2012, the fund has beaten its benchmark by 0.70 per cent and 0.60 per cent annualised gross, respectively. The fund is second-quartile against peers over the same time periods cumulatively.
“The combination of an experienced and stable portfolio management team and an established investment process which has produced strong returns has provided the conviction to assign the fund an S&P Capital IQ Gold/V3 grading,” says Anthony Karaminas, analyst at S&P Capital IQ Fund Research.
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