Morningstar Fund Ratings: Weekly Round-up

ANALYST RATINGS: This week, fund analysts reveal a new ratings for an HSBC tracker fund, upgrades for two Fidelity funds and a specialist fund wins back its rating

Morningstar Analysts 13 February, 2018 | 6:59AM
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New Ratings

HSBC FTSE All Share Index – Silver

Hortense Bioy

Aiming to fully replicate the FTSE AllShare Index at a rock-bottom fee of 0.07%, this fund is a worthwhile proposition for investors looking to gain broad exposure to the UK equity market. We expect the fund to deliver consistent above-average performance in the context of its investment category.

The Morningstar UK Large Cap Blend Equity Category includes skilled active managers, but these tend not to stay with asset management companies for the long haul. Their high turnover and inconsistent alpha generation give us confidence in the long-term investment merit of a cheap FTSE AllShare Index tracker like this one. The fund has also done a good job of tracking its benchmark.


Fidelity Special Situations – Silver

Fidelity Special Values Ord – Silver

Simon Dorricott

Fidelity Special Situations and Special Values have both been upgraded to Morningstar Analyst Ratings of Silver. They are managed by Alex Wright, who started his successful portfolio management career in 2008 on a small-cap fund before taking on an all-cap strategy in Fidelity Special Values in 2012.

Wright has demonstrated his ability to transfer his skills to an all-cap fund, with this success being based on a clear investment process, which he has consistently applied, focusing on investing in turnaround situations. The considerable resources backing the manager’s endeavours further enhance our view of these products.

From Under Review

Worldwide Healthcare Ord – Silver

David Holder

In December 2017, OrbiMed announced that founding partner Samuel Isaly would be stepping down as a portfolio manager, board member on this trust, and partner of the firm. After Isaly’s departure, the named managers on the trust are longstanding team members Sven Borho and Trevor Polischuk.

The loss of Isaly is noteworthy, but it is important to acknowledge both the highly collegiate nature of decision-making within a very well-resourced team and the broader knowledge-base at OrbiMed of more than 100 investment professionals. The team still boasts an impressive level of resource, expertise, and specialisation, and thus we have reinstated the Morningstar Analyst Rating of Silver, from previously Under Review.

To Under Review

River & Mercantile UK Equity Smaller Companies

Samuel Meakin

River & Mercantile has announced that Philip Rodrigs, manager of the Silver-rated River & Mercantile UK Equity Smaller Companies fund, has left the business with immediate effect. He departs following an internal investigation into a professional conduct issue, which River & Mercantile has stated was unrelated to his portfolio management responsibilities.

Dan Hanbury has assumed responsibility for the management of the fund, having managed it previously prior to the appointment of Rodrigs, and will now manage it on a permanent basis. Rodrigs was appointed as manager of the fund in September 2014, having previously managed the Investec UK Smaller Companies fund to good effect.

The experience of Rodrigs and his qualitative input into the investment process were key factors underpinning our Silver rating. We will work quickly to assess the situation, but in the meantime, given the materiality of Rodrigs to the fund’s Morningstar Analyst Rating, the fund has been placed 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.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
ES R&M UK Equity Smaller Coms B Acc3,023.24 GBP-0.38Rating
Fidelity Special Situations4,359.25 GBP-0.75Rating
Fidelity Special Values Ord294.00 GBP-0.34Rating
HSBC FTSE All Share Index R Acc6.68 GBP-0.53Rating
Worldwide Healthcare Ord3,142.43 GBP2.86Rating

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