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Asia star to retire

Angus Tulloch is retiring but analysts say good succession planning means his Asia Pacific Fund should continue to do well
March 9, 2017

Renowned Asia fund manager Angus Tulloch is set to retire from Stewart Investors in September 2017, ending a 29-year career at the fund house and his management of Stewart Investors Asia Pacific Fund (GB0030183890).

Mr Tulloch's exit is a blow to Stewart Investors due to his long-running track record of delivering top-quartile performance. But commentators say his exit has been well planned. The manager had already handed over control of top-performer Stewart Investors Asia Pacific Leaders Fund (GB00B54S3722) to joint managers Sashi Reddy and David Gait in July 2016, as well as appointing Ashish Swarup co-manager of the Asia Pacific Fund.

Stewart Investors Asia Pacific Fund is ranked second out of 57 funds in the Investment Association (IA) Asia ex-Japan sector over 10 years to 3 March 2017. And between its inception on 30 June 1988 and 1 July 2016 the fund returned 3,990.4 per cent - more than three times the return of the IA Asia ex-Japan sector. The fund is soft closed to new investors to limit its size - an initial charge of 4 per cent is applied to all investments apart from any regular savings plans set up prior to 1 February 2004.

Analysts say Mr Swarup is likely to be capable of replicating the fund's success. Morningstar upgraded its rating on Stewart Investors Asia Pacific Fund last month after placing it on review last year due to the management transition.

Analyst Simon Dorricott said: "Swarup is now the sole decision-maker on the fund and has clearly been improving his knowledge of non-emerging-markets countries such as Australia over the past 18 months. This, together with the stock-specific changes we have seen in the portfolio so far, has increased our conviction in the continued application of the established and successful process."

Morningstar upheld its rating for Stewart Investors Asia Pacific Leaders due to lead manager Mr Gait's long track record at the firm. He joined the group in 1997 and has managed Stewart Investors Asia Pacific Sustainability since 2005.

Mr Tulloch has typically run his Asia and emerging markets funds defensively with a focus on fundamentals, preferring large companies with sustainable cash flows and robust balance sheets. That has resulted in a defensive portfolio, which has held up in downturns and periods of volatility.

Adrian Lowcock, investment director at Architas, says that Mr Tulloch's "more cautious approach when investing in the more volatile, high-risk, high-return markets rewarded patient investors as he protected their money from the worst of the volatility. Stewart Investors has been well prepared for [Mr Tulloch's] eventual retirement and had already begun the succession process with Angus Tulloch handing over lead manager responsibility for global emerging markets funds in 2008 and Asia Pacific portfolios in the first half of 2016."