Franklin Technology N Acc EUR

Analyst Report
Morningstar's Take
|02/12/2019

by Fatima Khizou


Franklin Technology’s new and unproven leadership keeps the Morningstar Analyst Rating for the fund’s W Acc USD share class at Neutral. All other share classes are rated Neutral.Jonathan Curtis took over the day-to-day management of this strategy from former lead manager JP Scandalios in September 2018. Curtis and James Cross were added as comanagers to the strategy in 2016, when Scandalios’ portfolio management responsibilities increased through his appointment as comanager on Franklin Small-Mid Cap Growth, alongside longstanding manager Ed Jamison. Upon Jamison’s retirement in December 2018, Scandalios was appointed sole manager on Franklin Small-Mid Cap Growth, thereby reducing his focus on this strategy. Although no longer involved in the day-to-day management of this strategy, Scandalios remains a named manager and a member of the technology and telecommunications team. Lead manager Curtis joined the group in 2008 and brings strong expertise in the sector, but this is first time managing money. He runs this strategy with the help of a broad and experienced bench of managers/analysts who source and vet investment ideas. Curtis follows the same investment approach used by former lead manager Scandalios, combining industry trends assessment with detailed bottom-up fundamental research. Each analyst is tasked with evaluating the long and short-term growth characteristics of their respective sub-sector, considering aspects such as the supply chain. This research effort, headed by Curtis, aims to identify attractive sub-sectors. It is then followed by detailed bottom-up fundamental research, which focuses around three key criteria: growth, quality, and valuation. The manager is long-term focused and pays little attention to the MSCI World Information Technology benchmark when constructing the portfolio. Individual positions generally do not exceed 5%, thus limiting stock-specific risk.Under Curtis’ watch through the end of October 2019, a short period, returns for the W Acc USD share class trailed the MSCI World Information Technology benchmark but beat the category average. The new lead manager needs to prove he can execute the process consistently and successfully over a long period before we take a more positive view on the overall strategy.

Morningstar Analyst Rating™
To find out how Morningstar rates a fund click here.
Portfolio RoleNiche player. The focused nature of sector-specific funds means they are typically best suited to playing a small part in a broader portfolio.
Morningstar Pillars
PeopleAverage
The new lead manager’s short tenure and limited portfolio management experience earns the strategy an Average People rating.
ParentAverage
Changes afoot.
ProcessAverage
While the strategy’s approach is unchanged, doubts around its execution keeps its Process rating at Average.
Performance
A short track-record.
Morningstar Analyst RatingMorningstar evaluates funds based on five key pillars, which it's analysts believe lead to funds that are most likely to outperform over the long term on a risk-adjusted basis.
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A fim de prover consistência para todos os relatórios fornecidos por diferentes Asset Managers, os data points calculados apresentados são gerados usando uma metodologia de cálculo proprietária da Morningstar, que pode ser conferida com mais detalhes em(https://www.morningstar.com/research/signature)
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