New Fund Ratings from Morningstar OBSR

Morningstar OBSR has just awarded new Bronze ratings to three very different funds

Alanna Petroff 28 September, 2012 | 2:15PM

Morningstar OBSR has just released new analyst ratings this month for three funds. Allianz Gilt Yield, Fidelity UK Smaller Companies and Royal London UK Equity Income have all be given Bronze ratings.

Find out from Morningstar OBSR why each fund received a new Bronze rating:

Allianz Gilt Yield

The fund is managed by Mike Amey of PIMCO, a subsidiary of Allianz with a long heritage in fixed income investing and an established approach to macroeconomic analysis that includes analysis of both structural and cyclical factors. We believe the fund manager is highly adept at both using and shaping this analysis for a UK context and consequently at building a portfolio that reflects his views in a benchmark-aware manner. We therefore see it as a high-quality offering for gilt investors.

Fund size: £1.03 billion*

Fidelity UK Smaller Companies

The fund is managed by Alex Wright. Wright managed the Fidelity Institutional Funds UK Smaller Companies fund from its launch in February 2008. This fund was subsequently merged with the Fidelity UK Smaller Companies fund at launch in February 2011 when it was originally named Fidelity UK Opportunities until being renamed in September 2011. The investment approach is bottom-up and the manager invests with a contrarian mind-set; seeking companies which are unloved and undervalued, but in his opinion have the potential to recover. Overall, we believe that the manager has a well-defined process which is diligently applied and has demonstrated his ability to add value since launch. We therefore consider it to be a high-quality offering for investors seeking UK small cap exposure.

Fund size: £61 million*

Royal London UK Equity Income

The fund, which has been managed by Martin Cholwill since March 2005, targets an income that can grow over the long-term and will remain more than 110% above the FTSE All-Share index. Cholwill has almost 30 years of investment experience and has been managing equity income mandates since 1996. He applies a cash-flow orientated process to invest in companies that are attractively valued but offer sustainable and rising dividend steams. We believe the fund benefits from Cholwill’s experience and unwavering application of the process but also his pragmatism in seeking out attractively valued equity income opportunities and this approach has delivered a consistent return profile over time.

Fund size: £305 million*

Morningstar’s analyst fund ratings range from Gold to Negative. The ratings indicate whether Morningstar analysts are optimistic about a fund’s future performance. A Gold rating indicates Morningstar analysts think highly of a fund and expect it to outperform its peers and relevant index over a full market cycle of at least five years. Silver and Bronze ratings also indicate positive sentiment from Morningstar analysts. A Neutral rating indicates that Morningstar analysts believe a fund isn’t likely to deliver standout returns but also isn’t likely to significantly underperform. A Negative rating indicates Morningstar analysts believe the fund is inferior compared to its peers and has at least one flaw that is likely to significantly hamper future performance.

*As of 31 August 2012

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
Allianz Gilt Yield A174.86 GBP-0.21
Fidelity UK Smaller Companies A-Acc288.40 GBP0.00
Royal London UK Equity Income A816.81 GBP0.27
About Author Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.