Nordea 1 - Global Stable Equity E EUR

Analyst Report
Morningstar's Take

by Natalia Wolfstetter
Nordea Global Stable Equities seasoned managers’ and well-executed quantitative process make it a sensible choice for a conservative equity investment which combines a focus on quality with valuation discipline. It earns a Morningstar Analyst Rating of Bronze across most share classes. The priciest share classes are rated Neutral, while the cheapest earns a Silver rating.

The strategy benefits from its distinctive process, which is designed to find companies with stable earnings on top of low or moderate stock price volatility. The managers’ initial screens leave around 350 candidates for their final portfolio of 90 to 110 names. In the final stage, opinions of leading sell-side analysts, macroeconomic risks, ESG considerations and risk contributions of each company are assessed before making changes to the portfolio. While the managers pay a lot of attention to valuation, they won't invest in a company purely on valuation grounds.

This approach typically leads to a more defensive portfolio than peers. At end-February 2023, the strategy had almost twice the category average’s weight in defensive sectors, and it scored above average on quality metrics. As expected, it contained losses during selloffs, including the fourth quarter of 2018 and the 2020 coronavirus correction. The strategy proved fairly resilient in 2022, supported by strong selection in the technology and healthcare sectors, though somewhat hampered by a lack of energy exposure.

The strategy features two managers who have developed its unique approach and have run it to good effect since 2005, with Nordea Invest Stabile Aktier being the oldest vehicle. Robert Naess has more than 20 years of investing experience while Claus Vorm, who had more of an academic profile, joined Nordea in 2004. We think that there is a good balance in the tandem, though it is much smaller than many competitors in the global equity space. The managers benefit, however, from Nordea’s large resources in multi-asset investing, and overall we think they can adequately handle the workload that comes with this approach.
Morningstar Medalist Rating™Balancing quality and valuations effectively.
To find out how Morningstar rates a fund click here.
Morningstar Pillars
PeopleAbove Average
ProcessAbove 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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