Morningstar Fund Ratings: Weekly Round-up

ANALYST RATINGS: This week Morningstar analysts reveal an upgrade for JPM and downgrades for Neuberger Berman and T. Rowe Price

Morningstar Analysts 5 March, 2019 | 1:35PM
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JPM Emerging Europe Equity – Bronze

Peter Brunt

This UK OEIC was moved to a Morningstar Analyst Rating of Neutral from Bronze upon JPM's announcement of plans to merge it into JPM Emerging Markets as part of its optimisation programme. It had fallen in size to £80 million as of February 2018. While it remains small – GBP 55 million at the end of January 2019 – significant shareholder demand at the Extraordinary General Meeting saw the proposed merger cancelled and the fund continue life as a going concern with the full backing of the group. The strategy continues to benefit from a long-standing and experienced manager, backed by considerable resources, who has consistently applied the same approach for over 15 years. In light of this, we have raised the fund's Morningstar Analyst Rating back to Bronze.


Neuberger Berman High Yield Bond – Bronze

Louise Babin

Neuberger Berman High Yield Bond fund’s Morningstar Analyst Rating has been downgraded to Bronze from Silver. Lead manager Tom O'Reilly will retire at the end of 2019, having been on this strategy since 2006 and in charge of the firm's high-yield effort since December 2015. The group of four comanagers supporting O'Reilly remains strong by industry standards, but the second change of leadership in four years gives reason for caution. A trend of middling performance since the outstanding relative returns during the financial crisis also continued through 2018, which was disappointing given the strategy’s defensive tilt.

T. Rowe Price Global Technology Equity – Neutral

Mathieu Caquineau

T. Rowe Price Global Technology's Morningstar Analyst Rating has dropped to Neutral from Silver as a new, unproven manager takes over. The departure of Josh Spencer from this closed strategy is a loss. He had successfully led the strategy since 2012. Spencer will take over US-sold T. Rowe Price New Horizons on March 31, 2019, and will be replaced here by Alan Tu, who is a logical successor. He has worked closely with Spencer on this strategy as a tech analyst covering enterprise software, having joined T. Rowe Price as an analyst in 2014. Tu has no record running money, and while he will rely on the same analyst team that has contributed to the strategy's past success, it’s still too early to build a positive conviction on the fund. 

Moved from Under Review

Schroder Japan Growth (SJG) – Neutral

Schroder Tokyo – Neutral

Peter Brunt

This strategy's long-standing manager, Andrew Rose, will retire in June 2019. He will be replaced by Masaki Taketsume, who has long analytical knowledge in Japanese equities but no portfolio management experience. While we like the structured approach to research here, a lack of visibility on Taketsume's ability to implement what is a relatively flexible strategy results in a lowering of the Morningstar Analyst Rating to 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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