Morningstar Fund Ratings: Weekly Round-up

ANALYST RATINGS: This week, fund analysts reveal an upgrade for PIMCO and downgrades for GAM and Investec

Morningstar Analysts 2 October, 2017 | 1:25PM
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Upgrades

PIMCO GIS Global High Yield Bond – Silver

Niels Faassen

Prudence is the watchword here. Lead manager Andrew Jessop keeps this fund focused on the higher-quality end of the high-yield spectrum. While the fund has delivered compelling risk-adjusted returns under Jessop’s watch, its conservative profile explains much of its peer-relative performance: a tendency to protect during credit market downdrafts and lag during rallies. PIMCO High Yield’s experienced management team, led by Jessop, plies a straightforward and risk-aware process. The firm’s deep analyst bench further supports our increased conviction in the fund.

Downgrades

GAM UK Diversified – Neutral

Simon Dorricott

The longstanding manager of this fund, Andrew Green, is stepping back at the end of the year and passing management responsibility to Chris Morrison and new recruit Adrian Gosden. The two will be working together as co-managers using a process similar to that used by Gosden when he worked with Adrian Frost at Artemis and also reflecting the fundamental work that Morrison has been conducting for this fund since he joined the team in 2011.

Although they are co-managers, it seems that Morrison will have more say on which ‘buy rated’ stocks are held in this fund and on weightings. The reliance on fundamental research and the lack of Green’s decision-making, which was largely based on technical analysis, shows a clear change of approach, despite the recovery/contrarian philosophy being set to stay. Given the forthcoming changes to decision-makers, investment process and resources, and the lack of a truly applicable track record from the new managers, we have decided to assign the fund a Morningstar Analyst Rating of Neutral.

Investec Asia ex Japan - Neutral

Simon Dorricott

From October 1, the group plans to move this fund from the 4Factor Asia team led by Greg Kuhnert, instead placing Charlie Dutton at the helm. Dutton is a relatively recent addition to the group, having joined in December 2016 from a small boutique, Coupland Cardiff. The approach Dutton intends to follow here will be very similar to that employed on the Global Franchise fund managed by the co-head of the team, Clyde Rossouw. Support is provided by the quality team within which Dutton sits; however, that is a global team with limited coverage of Asian stocks. Given the changes to the decision-maker, investment process and resources, and the lack of a truly relevant track record from the new manager, we have decided to assign the fund a Morningstar Analyst Rating of Neutral.

 

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
Rating
Ninety One Asia Pacific Franchise B Acc£7,676.52 GBP-0.66Rating
PIMCO GIS US Hi Yld Bd R USD Acc14.68 USD-0.40Rating

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