Finding the top talent in the toughest sectors

Finding talented fund managers is more difficult in some areas than others, or so investment professionals often tell us. So we asked a panel of leading analysts which asset classes and sectors were most problematic and why.

In the second of a three part series (see first part here) we hear from some leading selectors from around Europe on how they handle US large caps and bonds. 

Luca Dal Mas — Baring Asset Management

Historically we struggled to find managers offering consistent returns in the US large cap sector since most funds in this space have been designed to allow very little tracking error versus their relevant benchmark.

Being a UK based firm we prefer to allocate to the US market in its entirety rather than apply the style box approach typical of the US investor and we don’t like to pay a fee to invest in funds that more often than not end up trailing the index.

We have therefore decided to select managers that focus very much on a non-benchmark approach, be it from a bottom up or top down perspective.

In the first category we invest with funds such as M&G American Fund and Nordea US Growth, where the manager has a strong and consistent track record in selecting stocks which offers returns in excess of the benchmark.

In the second category we invest in Fortis US Opportunities where the manager, François Mouté, has used his flexibility to change the exposure to the market to provide investors with excellent returns over the life of the fund.

Thomas Grüner — Grüner Fisher Investments

It is difficult to find talented managers, period, no matter what asset class or sector. Most managers don’t understand that there are times when the best action to take is to stop and think about what is really going on. Too much activity is not always ideal.