Morningstar Fund Ratings: Weekly Round-up

ANALYST RATINGS: This week fund analysts reveal upgrades for Artemis and Mid Wynd and downgrades for JP Morgan and River & Mercantile

Morningstar Analysts 6 March, 2018 | 7:18AM
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Artemis Global Select – Silver

Mid Wynd International Investment Trust – Silver

Fatima Khizou

For a growth-oriented strategy, we particularly like the process and portfolio construction used at these funds which helps to differentiate them from the crowd. They are also backed by an experienced team led by Simon Edelsten, where the sound and disciplined investment approach have led to strong risk-adjusted results over various time frames.

We believe that the effective implementation of this considered approach by a solid and stable team will result in continued outperformance across a market cycle. The fund’s Morningstar Analyst Rating is upgraded to Silver from Bronze to reflect our increased confidence in this strategy.


JPM Emerging Europe Equity – Neutral

Lena Tsymbaluk

J.P. Morgan has announced its plans to merge JPM Emerging Europe Equity (OEIC) into JPM Emerging Markets as part of its optimisation programme. Because of continued significant outflows from the fund in recent years, the firm believes there are limited prospects for its growth. The fund reached a peak in assets of £306 million in April 2011 but dropped to £80 million in February 2018.

The merger will happen on April 28, 2018, subject to approval at the Extraordinary General Meeting. If the proposed merger is approved, the fund will start the rebalancing process on the business day following the meeting.

This does not affect its mirror fund, Luxembourg-domiciled JPM Emerging Europe Equity, which has a Morningstar Analyst Rating of Bronze and is currently at £430 million in assets. This fund will continue to be managed by Oleg Biryulyov with the same approach. JPM Emerging Markets is a different proposition, as it offers broader emerging-markets exposure.

However, JPM Emerging Europe Equity SICAV is a viable alternative for investors who can access such a vehicle. Given that JPM Emerging Europe Equity will likely no longer be an investment proposition, we are moving its rating to Neutral.

River & Mercantile UK Equity Smaller Companies –


Samuel Meakin

In early February 2018, River & Mercantile announced that fund manager Phil Rodrigs had left the firm following an investigation into a professional conduct issue. R&M has stated that the issue was unrelated to his portfolio management responsibilities. Dan Hanbury was immediately appointed as his replacement for the UK Equity Smaller Companies fund on a permanent basis.

Although we valued the qualitative input Rodrigs had over and above the R&M stock-screening process and view his unexpected departure from the firm as a loss, Hanbury’s strong prior track record on UK small caps and long experience with R&M's proprietary approach suggest he is a capable replacement.

While the manager change has created some uncertainty, we believe that the fund still has investment merit with Hanbury at the helm. We have therefore retained a positive view on the strategy, albeit with a slightly lower level of conviction due to the changes.


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
Artemis Global Select I Acc1.93 GBP-0.24Rating
ES R&M UK Listed Smaller Coms B Acc2,816.72 GBP-1.38Rating
Mid Wynd International Inv Tr Ord777.00 GBX0.52Rating

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