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Morningstar Fund Ratings: Weekly Round-up

ANALYST RATINGS: This week, fund analysts reveal new ratings for Fidelity and Pimco and an upgrade for L&G

Morningstar Analysts 16 October, 2017 | 12:00PM

New Ratings

Fidelity Index WorldSilver

Dimitar Boyadzhiev

We have a positive view of the strategy as defined by the MSCI World, as it has proved difficult to beat by active managers over time. This, coupled with a rock-bottom fee of 0.15%, leaves the fund well-positioned to continue producing superior risk-adjusted returns relative to its active and passive peers in the category over the long haul. 

PIMCO GIS US Investment Grade Corporate BondBronze

Mara Dobrescu

The fund's advantages include the tenacity of its veteran lead manager, the support of a large group of corporate managers and analysts, and a versatile process that draws on the firm's robust macroeconomic and fundamental research. On the other hand, the fund’s high fees are a structural hurdle limiting the magnitude of its potential outperformance, which reduces its appeal to some extent.


L&G Fixed InterestBronze

Irene Ruiz Espejo

Mark Benstead has managed this fund since September 2014. He is an experienced investor and, despite being at the helm of this sterling-corporate-bond fund for only three years, he has demonstrated the ability to effectively execute its conservative approach. We are thus upgrading the fund’s Morningstar Analyst Rating to Bronze from Neutral. Benstead tweaked the strategy somewhat when he took over, raising the outperformance target from 75 basis points to 100 basis points. He also increased the focus on credit selection as the key alpha driver while keeping duration bets limited. Overall, we view the changes brought about by Benstead as positive. The fund’s cheap fees are an additional bonus.

PIMCO GIS Global Investment Grade CreditSilver

Mara Dobrescu

We have upgraded PIMCO GIS Global Investment Grade Credit’s Morningstar Analyst Rating to Silver from Bronze. Its advantages include the tenacity of its veteran lead manager, the support of a large group of corporate managers and analysts, and a versatile process that draws on the firm's robust macroeconomic and fundamental research. While the fees charged here are above the industry norm, investors who can access the fund’s rebate-free share class get a somewhat better deal. We believe this multifaceted approach will continue to serve investors well.

Robeco Global CreditsSilver

Niels Faassen

This fund has been managed by Victor Verberk since inception (July 2014). The investment process is a combination of top-down beta positioning (that is, management of the portfolio’s market sensitivity) and bottom-up security selection, with an emphasis on the latter. It allows the managers considerable freedom to invest based on their level of conviction. We value the process’ leeway and believe that Verberk has applied it effectively. Although the fund’s public track record is still relatively short, we find comfort in the team’s solid performance on its global credit mandate, which dates to 2010. The fund’s reasonable fees also provide it a tailwind versus peers, consolidating its appeal as one of our favourite offerings within the category.

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
Fidelity Index World A Acc238.92 GBP-0.20
L&G Fixed Interest R Acc149.80 GBP0.13
PIMCO GIS US IG Corp Bd E USD Inc10.72 USD-0.12
Robeco Global Credits F GBP113.57 GBP0.04

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