Morningstar Fund Ratings: Weekly Round-up

ANALYST RATINGS: This week fund analysts reveal new ratings for three Ruffer funds, an upgrade for AXA Fram and fund downgrades for Aberdeen

Morningstar Analysts 4 April, 2018 | 8:46AM
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New Ratings

LF Ruffer Total ReturnBronze

David Holder

The LF Ruffer Total Return Fund aims to preserve capital in all financial market conditions while delivering investment returns ahead of that from cash. Ruffer applies a collegiate and initially top-down investment approach, expressed through conventional asset classes such as global equities, conventional and index-linked government securities, cash, and some commodities.

These assets are then actively blended to ensure that there is always a balance between what are considered greed and fear assets. We favour Ruffer’s clear and consistent investment approach, which is executed by a well-resourced and capable investment team. In recognition of these positive attributes, we are awarding the fund a Morningstar Analyst Rating of Bronze.    

Ruffer Investment Company (RICA)Bronze

David Holder

The principal investment objective to achieve a positive total annual return, after all expenses, of at least twice the Bank of England base rate. Ruffer applies a collegiate and initially top-down investment approach, expressed through conventional asset classes such as global equities, conventional and index-linked government securities, cash, and some commodities. These assets are then actively blended to ensure that there is always a balance between what are considered greed and fear assets.

We favour Ruffer’s clear and consistent investment approach, which is executed by a well-resourced and capable investment team. In recognition of these positive attributes, we are awarding the fund a Morningstar Analyst Rating of Bronze.

Ruffer Total Return InternationalBronze

David Holder

The Ruffer Total Return International fund aims to preserve capital in all market conditions while delivering investment returns ahead of that from cash. Ruffer applies a collegiate and initially top-down investment approach, expressed through conventional asset classes such as global equities, conventional and index-linked government securities, cash, and some commodities.

These assets are then actively blended to ensure that there is always a balance between what are considered greed and fear assets. We favour Ruffer’s clear and consistent investment approach, which is executed by a well-resourced and capable investment team. In recognition of these positive attributes, we are awarding the fund a Morningstar Analyst Rating of Bronze. 

Man GLG UK IncomeBronze

Samuel Meakin

Man GLG UK Income is managed by Henry Dixon using the same value-based investment philosophy that he has used with success on Man GLG Undervalued Assets, which has a Morningstar Analyst Rating of Silver, and previously on Matterley Undervalued Assets.

Although Dixon’s strong track record stems mainly from his mainstream UK equities mandates, there is a high degree of overlap in terms of process and portfolio with this strategy, and we therefore draw an element of conviction from that track record. We believe the disciplined application of a solid, well-formed investment process by a capable portfolio manager makes this fund a strong proposition, and we have therefore initiated coverage with a Morningstar Analyst Rating of Bronze.

Upgrades

AXA WF Framlington Global Real Estate SecuritiesBronze

Ronald Van Genderen

We have upgraded the Morningstar Analyst Rating for AXA WF Framlington Global Real Estate Securities to Bronze from Neutral. The main strength of this team and process has been in Europe, as they have been managing the Silver-rated AXA Aedificandi and AXA WF Framlington European Real Estate with good success for over a decade. However, they have proven to be effective globally as well, especially after active management of the portfolio increased since 2012.

Stability and experience were already two positive attributes of this team of four portfolio managers, which is led by portfolio manager Frédéric Tempel, a very experienced and skilled real estate investor. The team runs a strong research-driven process with a long-term investment horizon. The fund’s track record has improved since the strategy’s overhaul in September 2008 and did well in terms of stock-selection returns in both Europe and the U.S., although Japan remained a market difficult to handle.

Downgrades

Aberdeen World EquityBronze

Aberdeen Global World EquityBronze

Muna Abu-Habsa

The funds continue to be managed by an experienced, well-resourced and, thus far, stable global equity team, headed by Stephen Docherty, whom we hold in high regard. Following the merger with Standard Life Investments, Docherty has been appointed as head of the global equity management committee, with Devan Kaloo as global head of equity.

The appointment of two Aberdeen personnel to senior positions provides a degree of continuity, but it's as yet unclear how changes to the research function supporting both entities will impact the stability of the team and the implementation of this strategy. We continue to think well of the seasoned, long-standing team running these funds, but the current uncertainty resulting from corporate change has reduced our confidence in the strategy’s long-term merit.

We have thus downgraded the funds to a Morningstar Analyst Rating of Bronze from Silver, as we believe that better reflects our current expectations of the funds over the long term.

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
Rating
abrdn Glb Sus Eq X Acc GBP22.18 GBP-0.31Rating
abrdn Global Equity I Acc426.09 GBP-0.58Rating
AXAWF Global Rl Est F Cap EUR172.10 EUR0.18Rating
LF Ruffer Total Return I Acc574.29 GBP0.14Rating
Man GLG Income Professional Acc C386.38 GBP-0.37Rating
Ruffer Investment Company Ord271.00 GBX0.18Rating
Ruffer Total Return Intl I GBP Cap1.78 GBP0.06Rating

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