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Morningstar Fund Ratings: Weekly Round-up

ANALYST RATINGS: Two upgrades and three downgrades this week, with BlackRock featured in bothe categories

David Holder 9 July, 2019 | 9:52AM

bronze

Upgrades

BlackRock Throgmorton Trust (THRG) – Bronze

David Holder

BlackRock Throgmorton Trust has successfully navigated into a new era under the sole management of the impressive Dan Whitestone following the retirement of the seasoned Mike Prentis. The appointment of Whitestone as sole manager has been seamless and a sensible development as is the broadening out of investment flexibility to bring more alignment with Whitestone’s Hedge Fund. The levers available to him here make him well placed to make use of the broad range of tools and the wide opportunity set available. Our conviction has grown sufficiently to award the trust a Morningstar Analyst rating of Bronze from Neutral. 

Legg Mason WA Asian Opportunities – Bronze

Patrick Ge

We have upgraded Legg Mason Western Asset Asian Opportunities’ Morningstar Analyst Rating to Bronze from Neutral.  This is predicated on our increased conviction in the investment process; it features the well-established global Western Asset strategy, which we have confidence in. Furthermore, it has been applied consistently to generate alpha evenly across credit, rates, and currency over a market cycle. Along with experienced Asian fixed-income portfolio manager Desmond Soon and a stable and deep research bench at his disposal, we believe this has become a worthy investment proposition

Downgrades

BGF Continental European Flexible – Bronze

Ronald Van Genderen

We are reinstating the Morningstar Analyst Rating of Bronze for BGF Continental European Flexible at Bronze. It was rated Silver before the strategy was put under review. We consider lead manager Alister Hibbert to be an experienced and capable manager and appreciate he has been joined by comanager Giles Rothbarth in February 2019. However, despite our confidence in his skills, our overall conviction is reduced because of the continuous turnover and restructuring of the team supporting him. Since 2016, we have seen 10 people, including experienced professionals, leave the team, which currently has 19 analysts and portfolio managers. The current members are less senior overall and have been changing their roles and responsibilities due to the team’s instability. Adding to our reservations is the team’s workload. All members carry coverage responsibility and generate ideas for a wide range of European strategies which differ in style, market cap, and strategy (long-only and long/short). Hence, we believe there is substantial workload, especially for senior members, which makes us question the team’s effectiveness. A restructuring announced in June 2019 has further changed the set-up of the research team, with manager and analyst responsibilities reshuffling again.

BGF European Special Situations – Bronze

Ronald Van Genderen

We are reinstating the Morningstar Analyst Rating of Bronze for BGF Special Situations. It was rated Silver before the strategy was put under review. We consider lead manager Michael Constantis to be an experienced and capable manager. However, despite our confidence in his skills, our overall conviction is reduced because of the continuous turnover and restructuring of the team supporting him. Since 2016, we have seen 10 people, including experienced professionals, leave the team, which currently has 19 analysts and portfolio managers. The current members are less senior overall and have been changing their roles and responsibilities due to the team’s instability. Adding to our reservations is the team’s workload. All members carry coverage responsibility and generate ideas for a wide range of European strategies which differ in style, market cap, and strategy (long-only and long/short). Hence, we believe there is substantial workload, especially for senior members, which makes us question the team’s effectiveness. A restructuring announced in June 2019 has further changed the set-up of the research team, with manager and analyst responsibilities reshuffling again.

BlackRock European Dynamic – Bronze

Ronald Van Genderen

We are reinstating the Morningstar Analyst Rating of Bronze for BlackRock European Dynamic. It was rated Silver before the strategy was put under review. We consider lead manager Alister Hibbert to be an experienced and capable manager and appreciate he has been joined by comanager Giles Rothbarth in February 2019. However, despite our confidence in his skills, our overall conviction is reduced because of the continuous turnover and restructuring of the team supporting him. Since 2016, we have seen 10 people, including experienced professionals, leave the team, which currently has 19 analysts and portfolio managers.

The current members are less senior overall and have been changing their roles and responsibilities due to the team’s instability. Adding to our reservations is the team’s workload. All members carry coverage responsibility and generate ideas for a wide range of European strategies which differ in style, market cap, and strategy (long-only and long/short). Hence, we believe there is substantial workload, especially for senior members, which makes us question the team’s effectiveness. A restructuring announced in June 2019 has further changed the set-up of the research team, with manager and analyst responsibilities reshuffling again.

 

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
BGF Continental Eurp Flex D2 EUR28.53 EUR-0.47
BGF European Special Situations D251.35 EUR-0.19
BlackRock European Dynamic D Acc659.40 GBP-0.17
BlackRock Throgmorton Trust plc574.00 GBX0.00
Legg Mason WA Asian Opps X USD Dis(M)97.96 USD-0.88

About Author

David Holder  is a senior investment research analyst at Morningstar

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