Morningstar Investment Management Europe was a finalist in the Specialist Multi-Asset Group of the Year category at the Investment Week Specialist Investment Awards 2020.
Here we speak to Mike Coop, head of multi asset portfolio management at Morningstar Investment Europe Ltd, about the team's approach to multi-asset investing, ESG considerations and supporting investors.
Can you give an overview of the structure of the Morningstar multi-asset team and your approach to multi-asset investing?
We operate a global team structure with over 100 investment professionals across EMEA, Asia Pacific and North America teams researching over 300 equity, bond and currency markets. This research forms the bedrock of our long-term valuation driven approach.
We use our analysis of market fair values and risk to guide overall asset allocation and identify the best opportunities, seeking out the most effective way to gain exposure to markets based on our research on fund managers and funds.
We apply a rigorous portfolio construction process to maximise performance across a range of different economic and market conditions.
Our portfolios often contain contrarian and granular opportunities uncovered by our global research.
How have you incorporated ESG considerations into your investment approach and the fund range?
ESG is embedded into our capital markets and manager views that drive our portfolios. We embed ESG into our views about fair value of assets, utilising the established framework and analysis of ESG risk from Sustainalytics, and offer a dedicated ESG set of multi-asset managed portfolios as part of our range for investors.
These draw on Morningstar research's ESG framework to assess fund managers including ESG commitment, Morningstar fund sustainability rating and globe ratings.
How has the team responded to the market fallout from the Covid-19 pandemic this year?
We entered the crisis defensively positioned based on our assessment of above average valuation levels in equities and credit markets. As markets sold off, we added to equities and corporate bonds in late March and early April which benefitted performance.
These additions included niche opportunities such as energy companies that were trading at multi decade lows and Korea equities, which were beneficiaries of recovery in the global semi-conductor industry.
How do you support advisers and investors in terms of tools, educational support or enhanced communication?
Our first principle is to put investors first and nowhere is this more evident than in terms of the support that we provide to advisers.
We have become far more visible to advisers throughout 2019 and 2020. This includes the PFS roadshows, adviser lunch presentations, end client webinars and presentations, our adviser webinar series, and the introduction of portfolio progress reports. These reports are produced monthly for each portfolio and cover the returns, exposure and activity over the previous 12 months.
We also provide an array of communications that help both the client and adviser understand the portfolios. We provide transparent ongoing reporting via our factsheets and provide a 'portfolio change rationale' if we make changes to portfolios.
Additional materials include a range of newsletters covering our convictions, market updates, "Dear Client" letters that advisers can cut and paste and send out to clients and chart packs for review meetings.
Click here to find out more about this year's Specialist Investment Awards.