HEAD-TO-HEAD: Stewart Investors versus Templeton

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MANAGER REVIEW

The Stewart fund is managed by St Andrews Partners, a sub-group within Stewart Investors.

“While the strategy historically has been stable, it has undergone significant changes in the past year,” said Daniels.

London-based Ashish Swarup, who led this strategy’s UK-, Ireland-, and Singapore-domiciled vehicles, resigned from the firm in September 2019. Tom Prew, an Edinburgh-based team member since 2006 who already led the strategy’s segregated mandates and Australian vehicle, took over all vehicles at that time and appointed Chris Grey as backup manager.

The subgroup had reduced its members to nine from 16 two years ago, but while “the amount of change is significant, there are reasons to maintain confidence,” said Daniels.

St Andrews Partners handed control of its former Asia-Pacific and developed- markets mandates to another sub-group (Sustainable Funds Group), and now concentrates exclusively on emerging markets.

“We have the utmost confidence in Prew, who has come across as a thoughtful and articulate investor in meetings over the years, demonstrating both in-depth stock-level and industry- level knowledge,” said Daniels.

“He is a great manager and runs a good team,” he said.

The Templeton strategy is comanaged by Chetan Sehgal and Andrew Ness.

Although Sehgal, who joined Templeton in 1995, was named as manager in May 2017, he had been running the strategy alongside Carlos Hardenberg (who left in 2018) since October 2015.

Sehgal successfully steered the Templeton Emerging Markets Small Cap and Templeton Asian Small Cap strategies since their 2007-08 inceptions, but he now spends most of his time on this larger-cap mandate, according to Daniels.

“Sehgal is a savvy investor who demonstrates an intimate knowledge of portfolio holdings,” he said.

Ness joined Templeton in September 2018 after spending eight years as at Martin Currie, and was officially named the strategy’s comanager in December 2019.

“While Ness has 25 years of investment experience and delivered decent insights during the 2019-20 meetings, he has more to prove,” said Daniels

“Also, we need to monitor how effectively Ness collaborates with Sehgal given that they are based in Edinburgh and Singapore, respectively,” he said.

The duo is supported by the 80-plus-member Franklin Templeton emerging markets equity group, created in February 2018 to integrate two legacy units, “but it has since been plagued by elevated turnover,” noted Daniels.

“At this stage we are not entirely convinced about them,” he said.

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