Report Release Date: 4 Mar 2010
Analyst: Oliver Kettlewell
Executive Summary
People: Tycho van Wijk has been involved with the fund since 2001. In 2005 he became fund manager and since 2009 he's benefited from the support of a second manager Tjeert Keijzer.
Parent: We see ING IM as an average fund house. While it is positive that funds usually have sufficient resources, fund costs have recently increased.
Process: The process focuses on uncorrelated investment categories, leading to a diversified portfolio.
Performance: Since Van Wijk took over in 2005, the fund's returns have outperformed the category.
Price: The TER is average compared with the category.
Morningstar Opinion
ING (L) Invest Global Opportunities is an excellent global equity fund.
During the period from 2005 through 2009, this fund has beaten 95% of its Morningstar category peers. (The International share class was launched in Aug. 2006, so prior to this we've taken returns from the Dutch share class, which has a longer track record.) When Tycho van Wijk took over as fund manager in 2005, he introduced a new investment process. Prior to Van Wijk's appointment, the fund's return remained below the category average and was very dependent on the technology sector, which comprised more than half of the portfolio.
Van Wijk quickly implemented changes to the fund's process when he took over in 2005. From the start, he opted for a strategy that involved a broader coverage of sectors compared with his predecessor. The investment process is now composed of seven long-term themes, such as industrial innovation and demographic shifts. Within these themes, he keeps an eye on subcategories that experience short-term changes. Van Wijk is involved in the identification of top-down themes, while a separate team of analysts located alongside Van Wijk in The Hague is dedicated to equity research. However, the analysts support is not exclusive to this strategy, as they provide input for the full range of ING IM's equity funds.
Van Wijk received extra support for the strategy in July 2009 with a new portfolio manager—Tjeert Keizer—who is dedicated to the fund. Keizer helps by creating models to test new and current themes in the portfolio. He’s also charged with risk control and has seven years' quantitative investment experience. We see it as a positive move that ING has increased resources to an already successful fund.
A further change since our last assessment: The benchmark has been changed from the MSCI World Growth Index to the MSCI All Countries World Index. As a result, there is now more room within the investment approach to go outside the traditional investment universe of growth stocks. Nevertheless, the portfolio retains its growth style and the team members maintain their benchmark-agnostic approach to stock selection.
The fund distinguishes itself by reducing the number of positions within the portfolio during down markets. In 2008, a notable example, this approach worked relatively well. The fund's 42% loss that year was in line with the category average, while its return in rising markets is better than that of most competitors. During Van Wijk's tenure the fund has gained 4.8% annualized, while its typical global competitor has a negative-return track record. During the same period, the fund's standard deviation was average, which means that it has a favorable risk/return profile.
We think this is an excellent fund, and therefore we maintain our Superior rating.
*The above returns are in EUR terms.
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