Morningstar: No rating changes after Templeton move

Franklin Templeton announced last week that Mark Mobius is to stand down from 12 Luxembourg Sicavs, as reported.

All of the 12 strategies are available for sale in Singapore or Hong Kong, according to FE data.

Although Morningstar can downgrade a fund when manager changes occur, it did not happen in this case, according to Germaine Share, senior manager research analyst. 

“This latest announcement is a sensible step in further paving the way for Mobius to step back, and there are no immediate Morningstar Analyst Rating implications following the change,” Share said in a statement.

“We think that Templeton Emerging Markets Group is heading in the right direction and investors should not be concerned about the announced portfolio management appointments.”

The changes in portfolio management will take place in two stages, the first effective 3 April and the second on 31 May, subject to regulatory approval.

Old new managers

According to Share, Mobius has not been involved in the day-to-day management of the funds he will exit, and in most cases the newly- named portfolio managers have been doing the heavy lifting for a long time.

For example, Allan Lam, who will be assuming the lead portfolio manager of the Templeton Asian Growth Fund, has been the final decision maker of the strategy since 1999. 

“This development therefore improves accountability at the portfolio manager level, providing transparency to investors,” she said.

Share added that the group has been gradually setting the stage for Mobius to step back of the past few years. In April last year, he was replaced by Stephen Dover as the group’s chief investment officer. Since his appointment, Dover has begun changes to the group, such as appointing portfolio managers Chetan Seghal and Carlos Hardenberg to take over the Templeton Emerging Markets Fund. 

Although Mobius is stepping down from 12 strategies, he will continue to be involved with the firm’s investment process, participating in its research efforts and company visits, sharing investment ideas and advising the team on its investment process.

He will continue also continue as the lead manager of the Templeton Asean Fund as well as other mandates across the region, according to the firm.

The three-year performance ending 24 March of the 12 funds Mobius is stepping down from, including the Asean fund that Mobius will continue to manage, according to FE data.

Of the 12 funds, eight funds had positive returns, while four were negative.

The Asean fund’s performance was negative since it incepted in November 2014.

 

All fund NAVs in the charts have been converted to US dollars. Note that funds may be denominated in currencies other than the US dollar.

Portfolio management changes