HEAD-TO-HEAD: Allianz GI versus Fidelity

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MANAGER AND TEAM REVIEW

Ge has concerns for both the Allianz and Fidelity funds’ management teams. For Allianz – it is the number of analysts supporting the fund managers.  The Fidelity fund, meanwhile, had just gone through a manager change.

The Allianz fund has been managed by Mark Tay since the product’s inception in 2014. Tay is a seasoned Asian credit investor, with 24 years of investment experience, according to Ge.

Also named in the strategy is David Tan, who is the firm’s chief investment officer, although he is not involved in the day-to-day management of the strategy and operates in a risk oversight capacity, he said.

Tay and Tan are supported by a four-member team, which Ge believes is “undersized”.

Each analyst covers around 50-60 issuers spread across investment-grade and high yield, which is a relatively heavy workload compared with rivals that average 20-40 issuers per analyst, Ge explained.

“But I would say that the team has been stable. Tay also said they are looking to add an additional one or two analysts. We are watching that closely, although he did not mention a timeline,” he said.

Meanwhile, the Fidelity fund is lead by co-managers Tae-Ho Ryu and Terrence Pang, who had been with the firm since 2010 and 2013, respectively. They were named assistant portfolio managers in June last year and were promoted to co-managers in February.

They took over the fund from Bryan Collins, who was also the firm’s head of Asian fixed income. Collins, who had been managing the fund since 2009, announced earlier this year that he was leaving in June, but will still be available as an advisor until the end of this year.

When Collins was managing the fund, its Morningstar people pillar rating was rated “High”, according to Ge.

“That means we had conviction in Collins. But with him leaving, we actually downgraded the people pillar rating to ‘Average’,” he said.

He explained that while Ryu and Peng are experienced investment professionals in the Asia high yield space, this will be their first time to manage a strategy.

“We need time to evaluate them and see how they make out their own track record,” Ge said.

Ge noted, however, that globally, Fidelity is very mindful of its succession planning and its current portfolio managers have been appointed internally.

“Part of their initiative globally is to increase their portfolio manager bench, promoting a few people first from analysts to assistant managers, and then naming them as actual portfolio managers,” he said.

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