Morningstar Fund Ratings: Weekly Round-up

ANALYST RATINGS: This week fund analysts reveal new ratings for Amundi and Vontobel, and a downgrade for Fidelity

Morningstar Analysts 30 April, 2018 | 12:50AM

New Ratings

Amundi IS MSCI Europe Quality Factor ETF (QCEU) - Bronze

Dimitar Boyadzhiev

This fund is a sensible choice for those seeking to invest in the higher-quality segment of the European stock market. The fund’s underlying index selects stocks from MSCI Europe with strong profitability, consistent earnings, and low levels of debt. Countries and sectors are not capped, allowing the fund’s allocation to deviate away from the broad market. While the fund’s defensive posture should help it outperform its Morningstar Category peers in down markets, it may hold it back in up markets. All told, we have a strong conviction in the fund’s process, but its limited live track record limits its Morningstar Analyst Rating to Bronze.

Vontobel Emerging Markets Debt - Bronze

Niels Faassen

Lead manager Luc D’hooge has successfully applied his distinguishing and time-tested philosophy for emerging-markets hard-currency debt both at Vontobel and, prior to that, at Candriam from 2002 to 2013. D’hooge and comanager Wouter van Overfelt have managed this fund since its inception in June 2013. The fund’s high-conviction, bottom-up-driven approach, focused on finding relative value opportunities, has served investors well. The manager has built a long and convincing track record. Since the fund’s inception in June 2013, the team has delivered strong returns outpacing its category average and benchmark. The manager’s search for relative value opportunities does lead to a slight overweighting in less-liquid frontier-markets issuers, which adds to the fund’s risk profile. Its below-average fees add to the fund’s appeal.

Downgrades

Fidelity Euro Blue Chip - Neutral

Mathieu Caquineau

Fidelity has changed the investment approach on Fidelity Euro Blue Chip and transitioned it to an analyst-driven portfolio, starting April 1, 2018. The fund is now overseen by an advisory team consisting of portfolio managers Alexandra Hartmann, Karoline Rosenberg, and Fred Sykes, as well as the head of portfolio construction and risk for Europe, Stephen Barnett. This team is responsible for execution, portfolio construction, and risk management, whereas stock selection will be entirely driven by Fidelity’s European sector equity analysts. Hartmann had managed the fund since January 2007 as sole lead manager and built a good track record with the strategy. Her involvement provides some continuity, while the fund will fully benefit from Fidelity’s strong research resources. That said, given the complete overhaul of the strategy and the new management structure in place, it is difficult to build a positive conviction at this stage.

 

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.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Amundi IS MSCI Europe Quality Fctr ETF-C81.67 EUR1.13
Fidelity Euro Blue Chip A-Dis-EUR25.75 EUR0.60
Vontobel Emerging Mkts Dbt I USD144.54 USD-0.20

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