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Morningstar Fund Ratings: Weekly Round-up

ANALYST RATINGS: Artemis Global Select, AXA Global High Yield Bonds, Carnegie Worldwide and BlackRock Japan Equity tracker

Morningstar Analysts 7 March, 2017 | 9:45AM

New Ratings

Artemis Global SelectBronze

Fatima Khizou

This fund is managed by a seasoned management team led by Simon Edelsten, who brings a wealth of relevant investment experience. The managers focus on quality companies that are poised to benefit from identified long-term growth trends and which are trading at compelling valuations. We think the investment process is well-thought through and the team’s emphasis on downside protection has resulted in solid risk-adjusted returns since the fund’s 2011 inception. Investors should be aware that the fund is likely to lag in strong rallies but tends to hold up well in downward markets. Overall, we believe the managers’ experience and complementary skills, combined with a disciplined investment approach, should continue to generate attractive returns for investors.

AXA WF Global High Yield BondsBronze

Carlos Lucar

This fund is managed by the highly-experienced duo of Carl Whitbeck--head of US fixed income at AXA--and James Gledhill--head of European high yield. They are backed by a team of ten dedicated high-yield analysts across the US and Europe, and receive further support from six portfolio manager/analysts who work on the day-to-day management of the team’s portfolios. They employ a buy-and-hold investment approach that aims to add value by cashing in coupons rather than betting on a potential rise in bond prices.

Different from other managers, this philosophy takes them to overweight lower-rated areas of the market (such B- and CCC-rated credits), but the aim is for credit selection to be the primary return driver. An historical underweighting in emerging-market corporate credits, a bias to short-maturity bonds and issuer diversification help to mitigate the risks inherent in this strategy’s lower credit quality bias. Overall, we believe the managers, backed by appropriate resources at AXA IM, can effectively execute the investment process and generate strong risk-adjusted performance over a market cycle.

Carnegie WorldwideBronze

Jeffrey Schumacher

At this strategy, Bo Knudsen, Bengt Seger, and Lars Wincentsen are the three decision-makers. They are supported by Carnegie’s very experienced and long-tenured investment team. The team focuses on its "best ideas" of 30 stocks in which it has high conviction. Stocks are split into a core allocation to “stable growth” firms that anchor the portfolio. The rest of the allocation is built around the team’s long-run themes. We think highly of the long-term focus, which allows strategic themes to play out, and turnover has been below 30% historically. The approach delivers portfolios that differ significantly from the index, so investors should be willing to ride out the inevitable tougher times.

Uni-Global - Equities WorldSilver

Natalia Wolfstetter

We think this fund is a very good way for investors to get exposure to global equities with low risk. The investment process blends strong quantitative optimisation techniques with fundamental risk assessments to produce a diversified portfolio with low volatility and reduced drawdowns compared with the broad market. The strategy is constantly being fine-tuned with the aim of better identifying and controlling risks such as valuation risk or interest rate sensitivity. We appreciate the quality and depth of resources available to run this fund and other regional offerings. Under the leadership of Alexei Jourovski since 2010, the team has gradually been reinforced and now includes seven managers and eight analysts who implement the process in a very disciplined and replicable manner.

Upgrades

BlackRock Japan Equity TrackerGold

Kenneth Lamont

This fund has proven to be one of the very best offerings in its category. Its underlying benchmark, the FTSE Japan index, has proven to be a difficult hurdle for many Japanese large-cap equity managers to clear over the medium to long term. The fund offers broad and representative passive exposure to Japanese equities, for a rock-bottom fee of 0.16%. This sizable cost advantage has contributed toward an impressive performance, clearly outpacing its average surviving category peer on a risk-adjusted basis, over the trailing three- and five-year periods. Given its strengths, we can be confident that over a full market cycle this fund will continue to outperform its peers on a risk-adjusted basis.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
Artemis Global Select I Acc97.31 GBP-0.50
AXA WF Glbl High Yield Bonds F-C USD141.79 USD-0.21
BlackRock Japan Equity Tracker D Acc195.11 GBP-0.81
Carnegie Worldwide 1A112.02 USD-0.13
Uni-Global Equities World SA-USD1,627.86 USD-0.50
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