Bem vindo ao novo morningstar.pt! Aprenda mais sobre as mudanças e como nossas novas funcionalidades vão ajudar no seu sucesso.

Franklin Technology N Acc EUR

Analyst Report
Morningstar's Take
|13/12/2018

by Fatima Khizou
*  This rating and report were issued for a different share class of this fund. The performance and fee structure of this class may vary from that referenced.


The fund’s new leadership and uncertainties around the implementation of the investment approach sees it earn a Morningstar Analyst Rating of Neutral.J.P Scandalios’ appointment to the role of comanager on Franklin Small-Mid Cap Growth in 2016 led to the addition of comanagers Jonathan Curtis and James Cross on this strategy. Scandalios had been sole manager since December 2003. In November 2018, the group announced that Franklin Small-Mid Cap Growth’s longtime manager Ed Jamieson will retire at the end of the year and that Scandalios will succeed him as lead. As a result of these changes, the day-to-day portfolio management responsibilities have been held by comanager Curtis since September 2018, and while he boasts a strong experience in the sector, this is his first-time running money. Scandalios is expected to split his time between this strategy and Franklin Small-Mid Cap Growth, but his attention is likely to be fully devoted to the latter. A deep and experienced bench of analysts, who specialise in technology stock and sector research, supports the managers. Curtis follows an investment process that is typical of a technology fund, 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 factors such as sector supply chain. This research effort, headed by Curtis, aims to identify attractive sub-sectors. This is then followed by detailed bottom-up fundamental research, which focuses around three key criteria: growth, quality, and valuation. The managers pay little attention to the MSCI World/Information Tech benchmark when constructing the portfolio, but individual positions have generally not exceeded 5%, thus limiting stock-specific risk. They are also long-term-focused, so turnover has been, and should remain, low. While the approach is unchanged, there are some uncertainties around its implementation under the new lead.From December 2003 through October 2018, the fund outperformed both the benchmark and the category average fund. Risk-adjusted results were also solid, with a superior Sharpe ratio to both measures over the same period. While this is a solid long-term track-record, it is solely attributable to former lead manager Scandalios, and Curtis will need to prove he can add value before we take a more positive view.

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
PeopleNeutral
A new leadership is behind this fund.
ParentNeutral
Changes afoot.
ProcessNeutral
Uncertainties over the process’s implementation under the new manager lead us to a Neutral view.
PerformanceNeutral
A solid long-term track record, though it is largely attributable to former lead manager.
PriceNeutral
Middling expenses.
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.
Permissions/Reprints   E-mail Morningstar     
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)