Allianz Europe Equity Growth CT EUR |
Morningstar's Take
|10/11/2023by Ronald van Genderen
| CIO and head of Allianz’ Global Growth team Thorsten Winkelmann and four of his team members left in October 2023, which is a considerable blow to this franchise. Although the remaining team provides continuity and boasts decent experience and expertise, the recent departures drive a downgrade of the People Pillar rating to Average from Above Average. The proven approach focused on growth investing remains unchanged and still deserves an Above Average Pillar rating. Christian Schneider has succeeded Winkelmann. He was already the team’s deputy-CIO following the merger of Winkelmann’s European Equity Growth team and the Global Equity team in 2020. His appointment is therefore a logical and sensible move. He is a seasoned investor with an extensive global equity merit; among others, he was part of the former Global Equity team since 2000. At the instigation of the team, well-experienced portfolio managers Julian Bishop and James Ashworth transferred internally to the team. The firm is in the process of further rebuilding the team, but it is unclear whether it will eventually return to its original strength of 12 members. We held Winkelmann in high regard and appreciated the strong investment culture in his team. Team members had ample latitude to scour the market for investment ideas, but Schneider could possibly add more structure and accountability to members' research responsibilities. Under Winkelmann’s watch, his team applied a time-tested approach and solid investment philosophy, and we don’t expect that to change under Schneider’s lead. The team will continue to focus on bottom-up stock selection with a long-term mindset. There is a consistent and strict focus on growth criteria, exemplified by the portfolio’s structural positioning in the far right of the growth column in the Morningstar Style Box. However, we don’t rule out that Schneider will make small enhancements in the execution of the approach. For example, by a slightly stronger emphasis on quality and valuation in stock research. Indeed, the strict adherence to a company’s quality-growth characteristics doesn't come without valuation-awareness, but this has never been leading criteria in the approach, and this results in above-average valuation metrics. At times, these can reach very high levels, as was the case from the end of 2020 through 2022. These distinctive characteristics, including the strong growth style and relatively richly valued portfolio, can lead to underperformance. This was on full display during 2022, when the strategy got hammered, and this underperformance continued in 2023 as the strategy lagged both the category average and benchmark. The recent underperformance has dented the excellent track record of the strategy since October 2009. Following the recent team instability, these results have become less relevant but remain informative on the performance profile that investors can expect from this approach. |
The departure of team head Thorsten Winkelmann and four team members is a considerable loss.To find out how Morningstar rates a fund click here.
| Morningstar Pillars | |
| People | Average |
| Parent | Average |
| Process | Above Average |
Morningstar Medalist RatingMorningstar assigns the Medalist Rating to funds that are qualitatively and quantitatively assessed through manager research and algorithmic processes. The assessment turns on three key “pillars” – People, Process, and Parent – that yield an estimate of how well a fund will perform before fees but after adjusting for risk.
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