Morningstar Fund Ratings: Weekly Round-up

ANALYST RATINGS: This week, fund analysts reveal new ratings for HSBC, L&G and Vanguard passive funds as well as an upgrade for M&G

Morningstar Analysts 20 February, 2018 | 3:39PM
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New Ratings

HSBC FTSE All-World Index – Silver

Dimitar Boyadzhiev

HSBC FTSE All-World Index’s strategy is a broad and diversified market index that covers large- and mid-cap stocks from both developed- and emerging-markets countries. Its portfolio aims to capture approximately 90%-95% of these countries’ market capitalisation. The fund’s low ongoing charge of 0.20% provides a competitive advantage over the long term and further supports our conviction in its ability to outperform Morningstar Category peers over the long term. We have therefore awarded it a Morningstar Analyst Rating of Silver.

L&G International Index Trust – Silver

Dimitar Boyadzhiev

L&G International offers UK investors broad and well-diversified access to large- and mid-cap stocks from both developed- and emerging-markets countries, excluding the UK. As of this writing, its benchmark, the FTSE World ex-UK index, includes over 3,000 stocks. The low ongoing charge of only 0.13% provides a competitive advantage over the long term and further supports our conviction in this fund’s ability to outperform its category peers over the long term. We have therefore awarded it a Morningstar Analyst Rating of Silver.

Vanguard Developed World ETF (VDEV) – Silver

Dimitar Boyadzhiev

Vanguard Developed World ETF’s strategy is a broad and representative market index that blankets nearly every stock in the developed-markets universe. Its portfolio aims to capture approximately 98% of the market capitalisation of 24 developed countries. The low ongoing charge of 0.18% provides a competitive advantage over the long term and further supports our conviction in this fund’s ability to outperform Morningstar Category peers over the long term. We have therefore awarded it a Morningstar Analyst Rating of Silver.

Upgrades

M&G Pan European Select – Silver

Samuel Meakin

John William Olsen has managed this strategy since July 2014, having previously built a strong track record at Danske Capital. He employs the same sensible and repeatable process here. It focuses on finding companies with sustainable long-term competitive advantages and then waiting for an opportunity to buy a position at an attractive price.

We believe the manager applies the process well and with consistency and that the team, led by Olsen, produces highly detailed stock research to support the process. Our increasing conviction is reflected in an upgrade in the strategy’s Morningstar Analyst Rating to Silver from Bronze.

iShares MSCI World ETF (IDWR) – Silver

Dimitar Boyadzhiev

iShares MSCI World Dist tracks a broad and diversified market index that has proved to be a formidable opponent for the category’s active funds to beat. Its portfolio consists of more than 1,600 large- and mid-cap companies from 23 developed countries.

It is not one of the cheapest MSCI World exchange-traded funds on offer, but we have a strong conviction in the merits of the tracked benchmark and the ability of the fund to outperform its average category peers. We have therefore upgraded it to a Morningstar Analyst Rating of Silver.

UBS ETF MSCI World USD (WRDUSA) – Silver

Dimitar Boyadzhiev

UBS MSCI World (Lux) tracks a broad and diversified equity market index that has proved to be a formidable opponent for the category’s active funds to beat. MSCI World covers more than 1,600 large- and mid-cap companies from 23 developed countries. It is not one of the cheapest MSCI World exchange-traded funds on offer, but we have a strong conviction in the merits of the tracked benchmark and the ability of the fund to consistently deliver above-average returns in the context of its Morningstar Category. We have therefore upgraded it to a Morningstar Analyst Rating of Silver.

Xtrackers MSCI World (XMWO) – Silver

Dimitar Boyadzhiev

Xtrackers MSCI World tracks a broad and diversified equity market index that has proved to be a formidable opponent for active funds to beat. MSCI World covers more than 1,600 large- and mid-cap companies from 23 developed countries. It is not one of the cheapest MSCI World exchange-traded funds on offer, but we have a strong conviction in the merits of the benchmark and the ability of the fund to consistently deliver above-average returns in the context of its Morningstar Category. We have therefore upgraded it to a Morningstar Analyst Rating of Silver.

Under Review

BlackRock Throgmorton Trust (THRG)

David Holder

On 12 February 2018, the board appointed Dan Whitestone as sole portfolio manager of the BlackRock Throgmorton Trust. Previously, he managed a long-short CFD sub-portfolio within the fund, while Mike Prentis managed the trust’s other assets in a long-only portfolio. Prentis will continue to be a key member of the team, but his lead manager status has been relinquished. He had been responsible for the management of this fund since BlackRock was appointed in 2008, and he remains portfolio manager for BlackRock Smaller Companies Trust.

Whitestone, who now heads the BlackRock UK smaller companies team, has worked alongside the experienced Prentis on this fund since March 2015. The news that Prentis is formally stepping down as decision-maker on BlackRock Throgmorton Trust is a loss for shareholders. Pending a formal assessment with Whitestone, the fund’s Morningstar Analyst Rating of Silver 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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