Morningstar Fund Ratings: Weekly Round-up

ANALYST RATINGS: This week Morningstar analysts have placed four funds Under Review following fund manager departures at T. Rowe Price, Schroders and Fidelity

Morningstar Analysts 22 January, 2019 | 7:32AM

Funds Placed Under Review

T. Rowe Price Global High Yield Bond – Under Review

Kenneth Oshodi

T. Rowe Price's long time high-yield manager Mark Vaselkiv plans to step away from day-to-day portfolio management responsibilities on U.S. fund T. Rowe Price High Yield and UCITS fund T. Rowe Price Global High Yield Bond effective Jan. 1, 2020. He will remain with the firm after that, serving as co-CIO and a member of its asset-allocation committee.

Vaselkiv has been with T. Rowe Price for 34 years and has led T. Rowe Price High Yield as its sole manager since June 1996. Although the firm announced these changes well in advance, we have placed these funds under review while we assess their impact.

Effective immediately, Rodney Rayburn will join Vaselkiv as comanager on T. Rowe Price High Yield. He will also join Vaselkiv and Michael Della Vedova as a comanager on T. Rowe Price Global High Yield Bond. Rayburn joined T. Rowe Price as a portfolio manager in 2014 and has served as portfolio manager of T. Rowe Price Credit Opportunities since July 2015.

Prior to joining the firm, he spent several years at alternative investment firms Värde Partners and Stark Investments. Rayburn is expected to take over full responsibility for the fund when Vaselkiv steps down in 2020.

In addition, Paul Massaro will take over Vaselkiv’s duties as the firm’s head of global high-yield strategies on Jan. 1, 2020. Massaro joined the firm as a high-yield credit analyst in 2003. He helped to launch T. Rowe Price’s bank loan effort in 2008 and has served as its leader since 2013. Additionally, he has served as lead manager of the firm’s institutional high-yield separate accounts since 2015.

Schroder US Mid Cap – Under Review

Schroder US Smaller Companies – Under Review

Lena Tsymbaluk

Schroders announced that Jenny Jones, the fund’s manager and head of the US Small and SMID Cap Equity team since 2002, is set to retire on 31 March 2019. Robert Kaynor, who has been comanager alongside Jones since January 2018 and director of research since January 2014, will manage this fund going forward and become head of the team.

Jones will continue to be actively involved in managing the fund before Kaynor takes over as a sole manager on 1 April 2019. During this time, there will be a comprehensive handover of responsibilities to ensure complete continuity and consistency. After this time, Jones will be available in an advisory capacity for several months.

Kaynor was hired in 2013 as the eventual successor to Jones. He started as a senior analyst but in January 2014 was appointed as director of research, responsible for making the team interaction more efficient. Jones was the final decision-maker on all purchases and sales in the portfolios until Kaynor’s promotion to the comanager role in January 2018. At this point, both Jones and Kaynor have had equal responsibility in all purchase and sale decisions in the portfolios.

Prior to Schroders, Kaynor was CIO and managing member of Ballast Capital Group, a fundamental long-short manager. From 2003 to 2010, he managed a long-short equity strategy at Ramius Capital Group and grew it from $100 million to $700 million during his tenure. From 2000 to 2003, he comanaged a long-short equity hedge fund focused on small- and mid-cap equities.

We will be meeting with Kaynor in the near future to more fully understand his plans for the fund. In the meantime, the fund’s Morningstar Analyst Rating has been placed Under Review.

Fidelity Euro Corporate Bond – Under Review

Louise Babin

Fidelity Euro Corporate Bonds’ Morningstar Analyst Rating of Bronze has been placed under review following the announcement of David Simner’s departure from the firm at the end of March 2019.

Simner has been the lead manager of the fund since December 2009, having joined Fidelity in 1996. His experience and tenure were key attractions for investors to this fund, along with his high-conviction approach to portfolio construction.

Assistant portfolio manager Ario Emami Nejad, who had supported Simner on the fund since late 2017 after moving over from the fixed-income trading desk where he spent five years, has been promoted to comanager. He will be joined by Rosie McMellin who has moved to the portfolio management team having joined Fidelity in 2017 as an Investment Director. Rick Patel will continue to be the back-up portfolio manager on the strategy.

We will assess the impact of these changes and update the fund’s global fund report in due course.

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
Fidelity Euro Corporate Bond A-Acc-EUR32.77 EUR-0.19
Schroder US Mid Cap Z Acc142.30 GBP0.21
Schroder US Smaller Comp Z Acc140.70 GBP0.21
T. Rowe Price Global HY Bd Q USD13.69 USD-0.23

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