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Two Gold Medals for the 'Team GB' of Funds

There are Golds and Silvers aplenty for UK fund investors

Holly Cook 31 July, 2012 | 11:46AM

*Please note this article was written on July 31st, when British medals were few and far between. Morningstar.co.uk would like to extend its congratulations and respect to all members of Team GB who have made us so proud. Go Team GB!

Team GB may be struggling so far* to bring in the medals at the 2012 Olympics, but while the nation waits with bated breath Morningstar analysts continue to award their own Gold, Silver and Bronze ratings to funds available for sale in the UK.

Using Morningstar's online tools, I’ve done some gymnastics of my own and dived into the data to find out which funds* are worth their weight in Gold, Silver or Bronze.

China
While known for their intense training regimes and outstanding accuracy, China's Olympians have also been known to crumble under the pressure, vaulting one minute and falling flat on their faces the next. Such performances are replicated in the Morningstar fund categories of China Equity and Greater China Equity, where the volatility associated with investing solely in Chinese equity is partly responsible for just one fund each earning Gold and Silver. Four such funds are rated Bronze.

Gold
First State Greater China Growth Fund
While it's debatable whether investors outside of Asia need a dedicated China fund, for those that do this fund's impressive investment team, robust process and enviable track record make it the standout choice. Read Morningstar's take here.

Silver
Fidelity Funds China Focus
Although investing in the volatile Chinese equity market can be treacherous, our analysts are confident that this fund can provide investors with some comfort given its solid investment team, strong track record and vast research resources. Read Morningstar's take here.

Bronze
Baring Hong Kong China Fund
Henderson China Opportunities
Jupiter China
Templeton China

Russia
They may be a powerhouse on the Olympics circuit but Russian funds have failed to come up trumps on the Morningstar scoreboard. No Golds here, nor Silvers, just a couple of Bronzes.

Bronze
Baring Russia Fund
This fund offers an actively managed portfolio of well-managed large- and mid-cap companies in Russia. The manager aims to deliver consistent upper-second-quartile performance versus its peers.

Neptune Russia and Greater Russia
Neptune Russia & Greater Russia is a strong choice within its category, but the fund does carry a high level of active risk. Still, investing in emerging markets is not without risks and the fund has outperformed its benchmark in most calendar years since inception. Read Morningstar's take here

'Team GB'
Despite the home bias clearly demonstrated by the crowds in East London this week, there's no home bias on display among Morningstar's fund research. A search of the Morningstar UK Large-Cap Blend Equity category returns just one Gold medal and three Silvers. But in keeping with Team GB's medal-winning history, there are plenty of Bronzes on offer. Here's to hoping our British Olympians outperform these Morningstar results.

Gold
Schroder UK Alpha Plus
Schroder UK Alpha Plus is one of the best UK equity funds around, but investors should be prepared to accept short-term volatility. Read Morningstar's take here.

Silver
JOHCM UK Opportunities
We believe this fund can continue to reward investors with a long-term mindset given the managers' strong skills and their disciplined process. Read Morningstar's take here.

Jupiter UK Growth
With an experienced manager who adopts a long-term and differentiated approach to growth investing, this fund is a strong offering but investors need to be patient. Read Morningstar's take here.

Standard Life UK Equity Growth
The return profile of this fund has moderated in recent years but we retain a positive view and continue to believe that the disciplined, research-intensive, methodical investment approach should serve investors well. Read Morningstar's take here.

Bronze
BlackRock Global Funds United Kingdom
Invesco Perpetual UK Growth
Lazard UK Alpha
Threadneedle UK

Search the Fund Quickrank to discover other UK Equity funds that have been awarded Bronze ratings.

USA
Our athletic North American friends are already racking up the Gold medals in the Olympics, as we've come to expect from one of the richest nations in the world with a strong sports-loving culture, but for investors looking at the Morningstar US Large-Cap Blend Equity category there are no Golds on offer. There are, however, two funds that have earned our Silver rating and several that are rated Bronze.

Silver
Capital International US Growth and Income
Slow and steady should win out over time here. The focus on higher-quality large-caps, plus the managers' ability to hold cash when they don't find enough opportunities, results in resilience during downturns. Read Morningstar's take here.

Investec American
This is a solid option within the US equity universe but investors should expect above-average volatility. The fund's philosophy can result in a portfolio with a contrarian tilt as the managers look for stocks that are temporarily suffering from investor scepticism or bad news. Read Morningstar's take here.

Bronze
Allianz US Equity
Fidelity American
M&G American

Search the Fund Quickrank to discover more Bronze-rated US Equity funds.

*The funds mentioned in this article were generated by a search of ISA-eligible, non-institutional funds available for sale in the UK.

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About Author Holly Cook

Holly Cook  is Managing Editor of Morningstar.co.uk