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Morningstar Fund Ratings: Weekly Round-up

ANALYST RATINGS: This week fund analysts reveal a new rating for Fidelity, an upgrade for Stewart Investors and a downgrade for L&G

Morningstar Analysts 24 April, 2018 | 8:12AM
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New ratings

Fidelity Global Multi Asset IncomeBronze

Barbara Claus

We have initiated coverage of Fidelity Global Multi Asset Income with a Morningstar Analyst Rating of Bronze. The fund follows a sound, income-oriented multistrategy approach with the aim of achieving an annual distribution of 4%-5% gross of fees. While the track record of this fund since May 2013 is not the longest, most of the underlying strategies in the fund have a longer track record and are of good quality. Our conviction in the fund is also based on the experienced fund managers around Eugene Philalithis and the quality and breadth of resources at Fidelity.


Stewart Investors Global Emerging Markets LeadersSilver

Simon Dorricott

The funds are managed by Ashish Swarup who became a portfolio manager at the group in 2016 and took over these funds in October of that year. The upgrade reflects our increased confidence in his application of the broad Stewart Investors approach, which has been confirmed both qualitatively and quantitatively. He is clearly using the research produced by the team and the portfolios continue to reflect the expected biases and performance pattern we associate with this investment approach.


L&G Sterling Corporate Bond Index - Neutral

Jose Garcia Zarate

This is a cheaply priced, tightly tracking index fund that would appeal to investors unwilling to take too much risk. These are aspects that we continue to value. However, by excluding BBB rated bonds, the index is not fully representative of the investment category. This strongly conditions its performance relative to peers in the UK corporate bond Morningstar Category, where the vast majority of mandates, whether passive or active, do not constrain themselves in such a manner. We do not feel sufficiently confident to assert that the fund will deliver returns above the category average, as this will be largely determined by the fortunes of the BBB rated segment that this fund excludes. For this reason, we are bringing the fund’s Morningstar Analyst Rating down to Neutral from Bronze.

Re-rated from Under Review

BlackRock Throgmorton TrustNeutral

David Holder

Longstanding manager Mike Prentis stepped aside in February 2018 and was replaced by Dan Whitestone, who has managed the fund’s CFD portfolio for three years, in addition to a long-short hedge fund. Whitestone looks for companies with sustainable growth criteria focusing on pricing power, strong brands, intellectual property, high returns on equity/returns on invested capital, and high barriers to entry. Therefore, there is continuity in terms of the broad investment philosophy.

The appointment of Whitestone as sole manager is viewed as a sensible development, and, with his hedge fund experience, he is well placed to make use of the broad range of tools available to him here. However, whilst we are positively minded, we wish to see how he adapts his approach to managing this trust’s assets, given its different investment objective and opportunity set versus his hedge fund. We award the fund a Morningstar Analyst Rating of Neutral.

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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