Fund Ratings: Upgrades and Initiations

Morningstar OBSR has upgraded ratings on two funds and initiated coverage on a handful of others

Alanna Petroff 6 March, 2013 | 12:30PM
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After months of behind-the-scenes research and meetings, Morningstar OBSR analysts have just formally announced some fund rating upgrades and new fund ratings.

The following funds have achieved either a Silver or Bronze rating from Morningstar OBSR, indicating that the analysts strongly believe that these funds will outperform their peer groups and benchmarks over the long term, on a risk-adjusted basis. This means the funds are expected to perform well and have less worry-inducing volatility compared to other funds.

Here are some comments from Morningstar OBSR analysts about each of the funds:

Threadneedle UK Fund (Analyst Research)
Rating upgrade
Morningstar analyst rating: Silver

"This fund is managed by Simon Brazier, who heads up the Threadneedle UK Equity team and joined Threadneedle from Schroders in April 2010. Mr Brazier is very mindful of the risk/reward dynamics of the fund and has delivered consistent relative performance in line with our expectations since joining Threadneedle. His skill in managing this fund combined with the strength of the UK Equity team led us to award this upgrade."

BlackRock Global Funds - Emerging Europe (Analyst Research)
Rating upgrade
Morningstar analyst rating: Bronze

"Sam Vecht has managed this fund since March 2009, and previously worked as an analyst on the emerging markets team since 2000. He also manages and co-manages a number of other funds. Mr Vecht has applied his investment process diligently and consistently and makes good use of the broader team and analytical resources at BlackRock. This led us to upgrade the fund to a Bronze rating from a Neutral rating."

AXA Framlington Health Fund (Analyst Research)
Coverage initiation
Morningstar analyst rating: Bronze

"This fund is managed by Gemma Game, who is part of AXA Framlington’s specialist healthcare team. We have a high opinion of Ms Game’s detailed and in-depth understanding of the different healthcare sectors, and her ability to combine this understanding with a strong valuation and portfolio construction discipline that is medium-term in nature, and biased towards small- and mid-cap companies. We therefore believe the fund is an attractive offering for investors seeking exposure to the healthcare sector. However, investors should be aware that the bottom-up fundamental research process with thematic inputs is likely to result in meaningful divergences from the broader healthcare sector and index from time to time."

Artemis Global Income Fund (Analyst Research)
Coverage initiation
Morningstar analyst rating: Bronze

"The fund was launched in July 2010 and has been managed since launch by Jacob de Tusch-Lec, who originally joined Artemis in 2005. The investment process leverages off the tried-and-tested approach to income investing as applied by Adrian Frost and Adrian Gosden in the management of the Gold-rated Artemis Income fund (Analyst Research). This global fund differentiates itself most from peers in the construction of the portfolio. Mr de Tusch-Lec is very cognisant of the concentrations and correlations that exist within the universe of equity income funds. As such he actively seeks to ensure that the portfolio is distinctly different from peers, by diversifying away from some of the more widely held equity income plays. From an income perspective, the fund targets a yield of around 4% and is strongly focused on the growth of income over time."

Standard Life (SICAV) Global Absolute Return Strategy Fund (Analyst Research)
Coverage initiation
Morningstar analyst rating: Bronze

"This Standard Life fund (which is also called the GARS fund) is managed by the Multi Asset Investment Team at Standard Life Investments, under the leadership of Euan Munro. The fund benefits from a strong team and a flexible investment approach that seeks to take advantage of a number of different investment themes and positions implemented on a medium-term time horizon but with the flexibility to change the positions in response to changing market conditions. The fund is managed dynamically and actively to meet its return objective of Euribor + 5% (gross of fees) over rolling three year periods."

This fund is domiciled in Luxembourg and available for European and UK investors. It is modelled after the UK-domiciled, Bronze-rated Standard Life Global Absolute Return Strategy Fund, which had some of the largest asset inflows out of any UK fund in 2012. The fund has been a particular favourite for institutional investors and pension funds.

IFDS IM WHEB Sustainability Fund (Analyst Research)
Coverage initiation
Morningstar analyst rating: Bronze

"Tim Dieppe, who joined WHEB Asset Management from Henderson alongside his colleagues in the Socially Responsible Investing team, leads this fund. The managers seek to add value by investing in companies that are growing faster than the market because of their sustainability features, namely those providing solutions to sustainability problems. This is viewed as a long-term approach and underpinned by the identification of sustainability themes. They recognise that this approach can often lead to significant biases within the fund and consequently in constructing the portfolio deliberately seek to maintain the regional weights close to those of the MSCI World index."

To hear directly from the managers at some of these funds, check out our "Fund Managers' Favourites" series in the Morningstar video centre

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.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
abrdnII- Gb Ab Rt Str A Acc EUR  
Artemis Global Income R Acc1.93 GBP-0.30Rating
Artemis Income R Inc2.32 GBP-0.42Rating
AXA Framlington Health R Acc3,159.01 GBP-0.16Rating
BGF Emerging Europe A233.41 EUR-37.67
CT UK Retail Inc GBP1.39 GBP-0.47Rating
FP WHEB Sustainability A262.68 GBP-0.72Rating

About Author

Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.

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