HEAD-TO-HEAD: Capital Group versus T Rowe Price

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MANAGER REVIEW

Since late 2012, Capital Group has split the New World fund’s equity management between subsidiaries Capital Research Global Investors, Capital World Investors, and Capital International Investors.

Nicholas Grace leads the whole strategy, and the team comprises Bradford Freer, Christopher Thomsen, Winnie Kwan, Jonathan Knowles, Carl Kawaja, Tomonori Tani, Piyada Phanaphat, Robert Lovelace, Lisa Thompson and Akira Shiraishi.

“The managers oversee separate sleeves of the portfolio, with Grace, Knowles, and Lovelace helping to ensure that their investing styles complement one another,” said Caquineau.

“There is healthy competition among the managers and their long-term approach means that it is not toxic,” he said, adding that they aligned with the fund, with each having at least $100,000 invested in the strategy.

Kirstie Spence became the fund’s third different fixed-income manager in the year to late 2019, and long-time manager Wahid Butt left the equity team too.

“The manager churn is unusual,” said Caquineau, although two recent additions, Phanaphat and Shiraishi “are hardly newcomers, as they have supported the strategy for 14 and nine years, respectively”.

Turning to the T Rowe Price fund, management continuity could be a problem.

The planned retirement of the fund’s long-time manager, Gonzalo Pangaro in January 2022, is a “loss for investors,” said Caquineau

He joined the firm in T Rowe Price in 1998 and has successfully managed the emerging markets strategy since 2009

“But the firm has laid out a sensible and lengthy succession plan,” said Caquineau.

Eric Moffett, who has two decades of experience and has been with T Rowe Price for 13 years, will become co-manager in April 2021 and eventually lead the strategy. He has worked closely with Pangaro and has managed an Asian ex-Japan equity fund (Asia Opportunities) since 2014 with strong results, according to Caquineau.

Malik Asif, associate fund manager since 2018, will also become co-manager in April 2021. Asif joined the firm in 2013 and is a less experienced investor, “but he has already made positive contributions to the portfolio and knows the analyst team very well”, said Caquineau.

Next year, Moffett will concentrate on stocks picks in Asia, while Asif will focus on other regions; both will work closely on all investment decisions and be supported by the firm’s emerging markets team of 31 analysts.

“T Rowe Price has a great culture, and fund managers are rewarded for their long-term performance,” said Caquineau.

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