Morningstar Fund Ratings: Weekly Round-up

ANALYST RATINGS: This week fund analysts reveal new ratings for a BlackRock bond fund and an AQR multi-asset fund

Morningstar Analysts 23 October, 2018 | 7:27AM
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New Ratings

BGF US Dollar High Yield – Bronze

Mara Dobrescu

We have initiated coverage of BGF US Dollar High Yield with a Morningstar Analyst Rating of Bronze. This fund’s managers have demonstrated their ability to maintain the fund’s edge over time, making the most of an expansive tool kit to navigate various market environments.

Instead of targeting a sweet spot on the credit-quality spectrum, the managers aim to make the most of their flexible approach, turning cautious when riskier bonds offer paltry compensation and bold when risk-taking pays. The fund’s fees have come down slightly over the past year, which is a move in the right direction, though they are not yet cheap enough to give this fund a significant tailwind over the competition. Overall, the fund earns a Morningstar Analyst Rating of Bronze.

AQR Global Risk Parity fund – Neutral

Matias Möttölä

We have initiated coverage on the AQR Global Risk Parity fund with a Morningstar Analyst Rating of Neutral. The fund is run by a capable team but the strategy lacks a clear and sustainable edge versus similar options. Risk-parity funds attempt to allocate money so that each asset class within a given portfolio contributes equally to a fund’s risk profile.

This fund’s risk weights are equally fixed between global equities, developed-market nominal government bonds, and inflation-protection – commodities and inflation-linked bonds – without any tactical considerations.

The fund’s differentiated return path may make it an attractive option for diversifying a traditional portfolio, and it's helped by relative low fees. Still, investors must be prepared for potentially extended periods of underperformance compared with traditional allocations.

 

 

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
AQR Global Risk Parity UCITS A1 USD Acc148.80 USD0.34Rating
BGF US Dollar High Yield Bd D2 USD45.70 USD0.27Rating

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