New Ratings
Brandes European Value – Silver
Mathieu Caquineau
Brandes European Value benefits from a consistent deep-value approach in the hands of experienced investors. This fund is managed by a seasoned and stable five-person investment committee. There’s been little turnover on the broader team that directly supports them through in-depth fundamental research. The team looks patiently for bargains and has a very long-term investment horizon. This approach has delivered robust relative returns in the long run. An investor-friendly parent and attractive fees add to the fund’s appeal. We have therefore awarded it a Morningstar Analyst Rating of Silver.
SLI Global Smaller Companies – Bronze
Peter Brunt
Building on the long-standing ‘Focus on Change’ investment approach, we have reason to believe that SLI Global Smaller Companies--Standard Life Aberdeen's first entry into the global small-cap space--stands as a strong option for investors seeking exposure to smaller companies globally. With the support of a seven-strong small-cap team, headed by the highly experienced Harry Nimmo, fund manager Alan Rowsell has managed to add value through strong stock selection since launch in 2012. Despite slightly higher-than-average fees, we are confident in the fund’s ability to outperform in the long-run.
Downgrades
Vanguard UK Government Bond Index – Silver
Jose Garcia-Zarate
A low-cost passive approach to gain access to the market of UK conventional government bonds makes sense, and the Vanguard UK Government Index Fund remains an above-average investment proposition. For this market exposure, we have a slight preference for the float-adjusted index approach that this Vanguard fund follows, as it provides a more accurate representation of what is available for investors to buy in the secondary market.
However, irrespective of benchmark, the structural long-dated issuance bias of the UK government-bond market creates room for active managers to play around with duration. For this reason, we conclude that a Morningstar Analyst Rating of Silver, rather than the previously assigned Gold, better conveys our level of conviction on this fund’s ability to deliver risk-adjusted returns above the Morningstar Category average over the long term.
