Morningstar Fund Ratings: Weekly Round-up

ANALYST RATINGS: This week Morningstar analysts reveal downgrades for Carmignac and Schroders following fund manager changes

Morningstar Analysts 19 February, 2019 | 8:22AM
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Funds Downgraded

Carmignac Patrimoine – Neutral

Mara Dobrescu

We have assigned Morningstar Analyst Ratings of Neutral to Carmignac Patrimoine and Carmignac Portfolio Patrimoine. They had been placed under review following a manager change and were previously rated Bronze. After almost two decades at the helm of these strategies, Edouard Carmignac stepped down in January 2019.

The new manager setup consists of Rose Ouahba, who had run the strategies’ fixed-income sleeves since 2007, and David Older, who was hired in 2015 as a technology specialist and became the firm’s head of equities in 2017. We appreciate Ouahba and Older’s extensive experience, but they will have the difficult task of rebuilding investors’ trust after several years of poor performance, and the effectiveness of their collaboration still needs to be demonstrated over a longer period.

Schroder US Mid Cap – Bronze

Lena Tsymbaluk

Jenny Jones, who has run the Schroder US Mid Cap strategy since 2004, will retire on 31 March 2019. Current co-portfolio manager Robert Kaynor will replace her as sole manager. Kaynor was hired in 2013 and quickly became director of research. In a nod to succession-planning, his responsibilities grew year by year, and his co-portfolio manager role was made official in 2018. He is well acquainted with the approach, which is defensive in nature, and the analyst team of six has been stable.

The loss of Jones, a seasoned investor, is a material change, but we see continuity here. In light of this and given that Kaynor doesn’t have a solo record running a portfolio, the funds have been assigned Morningstar Analyst Ratings of Bronze, having previously been rated Silver.

Schroder US Smaller Companies – Bronze

Lena Tsymbaluk

Jenny Jones, who has run the Schroder US Smaller Companies strategy since 2002, will retire on 31 March 2019. Current co-portfolio manager Robert Kaynor will replace her as sole manager. Kaynor was hired in 2013 and quickly became director of research. In a nod to succession-planning, his responsibilities grew year by year, and his co-portfolio manager role was made official in 2018. He is well acquainted with the approach, which is defensive in nature, and the analyst team of six has been stable.

The loss of Jones, a seasoned investor, is a material change, but we see continuity here. In light of this and given that Kaynor doesn’t have a solo record running a portfolio, the funds have been assigned Morningstar Analyst Ratings of Bronze, having previously been rated Silver.

Ratings Held

Schroder ISF US Small and Mid Cap Equity – Bronze

Lena Tsymbaluk

Jenny Jones, who has run the Schroder ISF US Small and Mid Cap Equity strategy since 2004, will retire on 31 March 2019. Current co-portfolio manager Robert Kaynor will replace her as sole manager. Kaynor was hired in 2013 and quickly became director of research. In a nod to succession-planning, his responsibilities grew year by year, and his co-portfolio manager role was made official in 2018. He is well acquainted with the approach, which is defensive in nature, and the analyst team of six has been stable.

The loss of Jones, a seasoned investor, is a material change, but we see continuity here. Despite fees being higher than the peer group median of clean share classes and Kaynor not having a solo track record, the funds maintain their Morningstar Analyst Ratings of Bronze.

Schroder ISF US Smaller Companies - Bronze

Lena Tsymbaluk

Jenny Jones, who has run the Schroder ISF US Smaller Companies strategy since 2002, will retire on 31 March 2019. Current co-portfolio manager Robert Kaynor will replace her as sole manager. Kaynor was hired in 2013 and quickly became director of research. In a nod to succession-planning, his responsibilities grew year by year, and his co-portfolio manager role was made official in 2018.

He is well acquainted with the approach, which is defensive in nature, and the analyst team of six has been stable. The loss of Jones, a seasoned investor, is a material change, but we see continuity here. Despite fees being higher than the peer group median of clean share classes and Kaynor not having a solo track record, the funds maintain their Morningstar Analyst Ratings of Bronze.

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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