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Angus Tulloch to retire: Should investors be concerned?

The sector-topping Asian equity manager is to retire after almost three decades of standout performance.

Gary Jackson

By Gary Jackson, Editor, FE Trustnet
Monday March 06, 2017

Asian equity star Angus Tulloch will retire from Stewart Investors on 30 September 2017 after 29 years with the company but fund analysts have said that investors in the firm’s funds should not be overly concerned.

Tulloch (pictured) joined Stewart Ivory in 1988 to establish an Asia Pacific ex Japan desk, which ultimately became Stewart Investors. His team set up a global emerging markets capability in 1992 and launched Scottish Oriental, an investment trust specialising in smaller Asian companies, in 1995.

Stuart Paul, managing partner at Stewart Investors, says Tulloch has been a “leading member” of the business after establishing its Asian and emerging markets capability.

“He helped oversee the team’s development over the following decades, providing exceptional long-term returns for investors in the funds he and his team have managed,” Paul added.

“Everyone at Stewart Investors will be very sorry that Angus has decided to retire. We will all miss his boundless energy and enthusiasm for the world of investment.”

Performance of Tulloch vs peer group composite since 1 Jan 1999


Source: FE Analytics

Tulloch oversaw funds such as Stewart Investors Asia Pacific Leaders, Stewart Investors Asia Pacific Sustainability and Stewart Investors Global Emerging Markets Leaders during his career.

FE Analytics shows that Tulloch’s total return since 1 January 1999 (which is as far back as our data on the manager goes) was 679.80 per cent compared with a 319.24 per cent gain from his peer group composite.

Adrian Lowcock, investment director at Architas, said: “Angus is amongst the most successful fund managers in the UK and set the standard for his peers when it came to investing in Asian and emerging markets.

“His 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. Focusing on fundamentals and investing in large companies with sustainable cashflows and robust balance sheets meant his long-term performance was impressive.”

Tulloch is known for his consistent outperformance. In the case of the £9.6bn Stewart Investors Asia Pacific Leaders fund, for example, the portfolio beat its average peer in nine of the 12 full calendar years he was at the helm.

As noted by Lowcock, one of the defining characteristics of the manager is his ability to protect capital on the downside. In 2008 Stewart Investors Asia Pacific Leaders fund posted a 15.76 per cent loss – far better than the 52.54 per cent loss made by its average peer and the 33.45 per cent fall in the MSCI AC Asia Pacific ex Japan index.

Annualised volatility of Tulloch vs peer group composite since 1 Jan 1999


Source: FE Analytics

FE Analytics also shows the manager has posted lower annualised volatility and was hit by a smaller maximum drawdown than his peer group composite since the turn of the millennium. The above chart demonstrates how Tulloch’s annualised volatility has tended to be lower than his average peer’s.

So, with the departure of such a strong manager, should investors in funds such as Stewart Investors Asia Pacific Leaders be concerned? Commentators say not, pointing to the well-ordered transition of responsibilities that has taken place in recent years.

Lowcock said: “Stewart Investors have been well prepared for his eventual retirement and had already begun the succession process with Angus handing over lead manager responsibility for Global Emerging Markets funds in 2008 and Asia Pacific portfolios in the first half of 2016. The culture and investment approach he helped develop is deeply ingrained within the business and investors shouldn’t be concerned with the news of his retirement.”

Darius McDermott, managing director of FundCalibre, added: “Angus' retirement has been fairly well sign-posted, with him handing over the lead management of a number of funds over the last few years.

“He has built a strong team at Stewart Investors and, while I am sure he will be missed, the funds are in very good hands. Managers like David Gait have done very well since taking on the funds and we are sure they will continue to do so.”

Stewart Investors Asia Pacific Leaders has been headed up by FE Alpha Manager David Gait and Sashi Reddy since Tulloch stepped back from day-to-day management in July 2016.

Over this time the fund has underperformed the index and sector with a 11.59 per cent total return. However, it’s important to note that these have been the rallying market conditions that the fund has tended to lag in and could show how it is still managed in a conservative way similar to Tulloch.

Performance of Gait and Reddy vs Tulloch’ peer group composite over 10yrs


Source: FE Analytics

The above chart shows how the two managers have outperformed others in the same space over the past years: Reddy is up 369.01 per cent while Gait has made 299.85 per cent.

This article is for professional investors only. You will be redirected to the News & Research homepage in seconds. If you are having problems getting to the page, please click here
Data provided by FE. Care has been taken to ensure that the information is correct, but FE neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.

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