Morningstar Fund Ratings: Weekly Round-up

ANALYST RATINGS: This week Morningstar analysts reveal re-affirmed fund ratings for Baillie Gifford, iShares and Schroders

Morningstar Analysts 27 November, 2018 | 8:15AM

Upgrades

DWS Deutschland – Silver

DWS Invest German Equities – Silver

Barbara Claus

We had downgraded DWS Deutschland and DWS Invest German Equity’s Morningstar Analyst Rating from Silver to Bronze in September this year, following Tim Albrecht’s decision to leave DWS at year-end. On 21 November 2018 Albrecht announced that he will stay with DWS. He will continue in his role as lead manager of both the funds that he has been successfully running since 2002.

The combination of an experienced manager with an excellent track record reassuming the helm here combined with ample resources, and a tried-and-tested strategy reaffirm our conviction in both funds. We have therefore reinstalled their former Morningstar Analyst Rating of Silver.

Ratings Re-affirmed

Baillie Gifford Japan (BGFD) – Bronze

David Holder

Baillie Gifford Japan is a solid choice for multi-cap Japanese equity exposure. In April 2018, Matthew Brett was appointed fund manager and Praveen Kumar his deputy, following the retirement of long-standing manager Sarah Whitley. Whitley's departure was significant with her nearly 40 years of accumulated knowledge and experience, but there remains a very substantial analytical and fund management resource here. Thus, we are confident that the investment process will not change materially. In addition, Brett had attended every board meeting since 2008.

Overall, we feel that investors are in good hands here. Very slight reservations remain as to the untested dynamic between Brett and Kumar, and this principally holds our overall conviction back at the margin. In our opinion, this strategy comfortably remains an above-average offering with notable potential. We maintain our Morningstar Analyst rating of Bronze.

iShares € Aggregate Bond ETF EUR Dist (IEAG) – Silver

Jose Garcia-Zarate

This exchange-traded fund stands as a very interesting proposition for investors seeking something akin to a “one-shop stop” investment-grade fixed income solution for a euro-denominated portfolio. The ETF tracks an index that provides comprehensive coverage of government and quasi-government, corporate, and covered bonds markets.

However, we acknowledge that the lack of flexibility in asset allocation can generate opportunities for competent active managers to add some value; whether by over- or underweighting certain segments or altering duration. For example, active managers can reach out for extra yield by tapping into the corporate bond segment, although this would add credit risk to the portfolio. The fund retains a Morningstar Analyst Rating of Silver.

Schroder ISF Emerging Asia – Bronze

Germaine Share

Schroder ISF Emerging Asia remains a solid investment proposition for investors who wish to gain equity exposure to the region. Deputy head of Asia ex-Japan equities Louisa Lo has led this fund since January 2002 and brings 25 years of investment experience to the table. She is an expert in Greater Chinese equities and has consistently impressed us with her market knowledge and clearly articulated investment cases.

Overall, we believe this product’s merits continue to strengthen, with a capable manager at the helm executing a proven investment process. That said, the supporting team has seen some turnover and the Asian ex-Japan equity category is a competitive one; we therefore maintain the fund’s Morningstar Analyst Rating of Bronze at this time.

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
Baillie Gifford Japan Ord773.00 GBX2.11
iShares € Aggregate Bond ETF EUR Dist120.17 EUR0.05
Schroder ISF Emerging Asia C Acc USD39.83 USD0.11

About Author

Morningstar Analysts   -