HEAD-TO-HEAD: Manulife vs Templeton

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Linda Csellak has managed the Manulife fund since 2010. She has 21 years of Asian equity investment experience, most of it in small caps, making her one of the most experienced managers in the category, Share said.

While she is supported by one small-cap analyst and ten portfolio managers and country specialists, “she is very hands-on with stock research”, Share noted.

“The concern we have here is that [the analysts] are country specialists, not necessarily focused on small-cap research,” she said, adding that this tends to be common for small cap funds.

“While the investment process seems sensible, we need more time to gain comfort around how Csellak and the small-cap analyst qualitatively stay on top of a diversified portfolio with a high annual portfolio turnover of 200% — 300%,” Share wrote.

The Templeton fund is managed by three portfolio managers: Chetan Sehgal, Vikas Chiranewal and Erman Kalkandelen. The first two led the fund since its inception and Kalkandelen joined in 2015.

“Chetan is the key strength of the team,” said Share. “He can give a very clear and detailed investment case for each stock. He consistently impressed us.”

The managers are supported by one of the largest emerging markets research teams of 51 portfolio managers and analysts located around the world. “This gives the team a very broad coverage of the small cap universe.”

The two senior managers have other involvements beyond the Asian Smaller Companies Fund. Sehgal is director of the firm’s global emerging markets strategy and Chiranewal managers two onshore Indian funds: the Templeton India Equity Income Fund and the Templeton India Growth Fund.

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