Morningstar Fund Ratings: Weekly Round-up

ANALYST RATINGS: Morningstar analysts downgrade two funds from Kempen and Royal London and put a Legg Mason fund Under Review

Morningstar Analysts 14 March, 2017 | 9:41AM
Facebook Twitter LinkedIn


Kempen European High Dividend FundSilver

Jeffrey Schumacher

While we continue to think this fund remains a very good choice for European equity income exposure, we're slightly less enamoured with it than we had been. Under the supervision of Jorik van den Bos, the team applies a strict and distinguishing concept of dividend investing, which provides discipline but also can become too restrictive, in our view. We continue to have our reservations regarding the strict application of a single absolute dividend yield hurdle as it can potentially limit their investment opportunities and the flexibility to capture their unorthodox philosophy in the final portfolio. Although we continue to see potential for outperformance in the hands of the seasoned investment team running the strategy, its execution somewhat reduces our conviction. We believe a Silver rating better reflects the fund's relative merits in its Morningstar category.

Royal London UK Government BondBronze

Carlos Lucar

We are lowering our conviction on this fund despite the significant experience of comanagers Paul Rayner and Craig Inches and their continuity at the helm. The duo, backed by RLAM’s close-knit fixed income team, implements a structured investment process that drives the fund’s strategic positioning. Over the past few years, the fund has retained an underweight duration stance which has been the key driver of its underperformance. While the managers rely on tactical positioning to add value, it is disappointing to see this has not been sufficient to offset the negative effect of the short duration positioning. Furthermore, the above-median fees for the fund are an additional headwind for the managers to overcome.

Ratings Moved to Under Review

Legg Mason IF ClearBridge US Equity Income

Fatima Khizou

ClearBridge has announced that Hersh Cohen will step off Legg Mason IF CB US Equity Income at the end of 2017 as part of a succession plan. Cohen--an industry veteran with nearly 50 years of investment experience--will continue to serve as ClearBridge’s co- CIO with Scott Glasser. Glasser, who helped Cohen design the ClearBridge Dividend Strategy in 2003, which mirrors the US-domiciled offering, will join current co-managers Michael Clarfeld and Peter Vanderlee on this fund after Cohen steps away. To assess the full impact of the pending change, this fund's Morningstar Analyst Rating of Bronze is Under Review.

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.

Facebook Twitter LinkedIn

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Kempen (Lux) European High Dvd AN44.02 EUR0.67Rating
Royal London UK Government Bond M Acc104.20 GBP0.19Rating

About Author

Morningstar Analysts   -

© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures