Veritas Asian A EUR Acc |
Morningstar's Take
|25/03/2025by Lena Tsymbaluk
| Veritas Asian benefits from a seasoned manager, a stable and experienced supporting team, and a differentiated approach. This remains a strong option for those seeking exposure to quality-growth investing in Asian equities. As such, the People and Process pillar ratings have been maintained at High and Above Average, respectively. Ezra Sun has been successfully managing Asian portfolios for more than 25 years. He has managed Veritas Asian since October 2004 and ran Newton’s Asian equity portfolios for five years prior to that with broadly the same thematic approach. The manager is aided by three analysts; each has been with the team for more than a decade and has at least 20 years of industry experience. The team is relatively small compared with some other Asian strategies we rate but suits this thematic approach, as Sun only invests in preferred sectors and themes. Xiaoyu Liu joined the team in July 2022; she is relatively senior with 15 years of experience in Asian equities and has an environmental, social, and governance investing background. She came from Aviva, where she managed Pan-Asian portfolios for eight years. This is a long-term succession plan for Sun, although there are no near-term plans to retire. Liu became co-portfolio manager on the China strategy in November 2022, although Sun remains the final decision-maker. The approach combines top-down thematic views and bottom-up stock selection within those themes. The manager seeks quality companies, which he defines as those generating material free cash flow and having high barriers to entry and predictable capital management. Sun invests in firms that can achieve his internal rate of return objective of 15% per year based on a five-year holding period. This way of thinking results in a high leaning to growth companies. The strategy has had a challenging couple of years, mainly 2022 and 2023, which has negatively affected the three-year record. This owes in part to the strategy’s growth style being out of favor and the consistent China overweighting. While there can be periods of underperformance given the unconstrained nature and high-conviction portfolio, the long-term performance over the manager’s tenure remains solid. |
This continues to be a strong option, although investors should be aware of the strategy’s unconstrained nature and a compact portfolio. To find out how Morningstar rates a fund click here.
| Morningstar Pillars | |
| People | High |
| Parent | Above 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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