New Ratings
Fidelity Emerging Asia – Silver
Andrew Daniels
We have initiated coverage of Fidelity Emerging Asia (UK OEIC) with a Morningstar Analyst Rating of Silver. Manager Dhananjay Phadnis is one of the best Fidelity has to offer in Asian equities. He has a strong track record in both this strategy and those that he has previously managed. In his search for companies with wide economic moats and quality management that are attractively valued, he is able to draw on Fidelity's extensive analytical resources. This and low fees give us a high level of conviction.
Morgan Stanley US Advantage – Silver
Jeffrey Schumacher
We initiate coverage on Morgan Stanley US Advantage Fund with a Morningstar Analyst Rating of Silver. Our conviction is based on the experience and stability of the team led by Dennis Lynch and the investment culture he has fostered. Furthermore, the team has implemented a long-term, highconviction approach successfully, looking for companies with defensible business models that dominate their markets or benefit from a strong competitive advantage. Lynch and team are willing to go wherever their research takes them and consequently pay little attention to the benchmark's sector weightings. They're also willing to take concentrated positions in their best ideas to help the fund get ahead. The fund has delivered above average returns and has kept its risk levels in check.
iShares MSCI EM IMI ESG Screened ETF – Bronze
Helaine Kang
We have initiated coverage of iShares MSCI EM IMI ESG Screened ETF with a Morningstar Analyst Rating of Bronze. This exchange-traded fund is an appropriate option for investors to access emerging markets equities, thanks to its low fee and broadly representative cap-weighted exposure. Despite the short track record, we believe the fund will continue to follow its parent index closely because of the strong similarities between the MSCI Emerging Markets IMI ESG Screened Index and its unscreened parent index. We also expect the fund's performance edge to be propelled by its low fee.
iShares MSCI EM SRI ETF – Neutral
Helaine Kang
We have initiated coverage of iShares MSCI EM SRI ETF with a Morningstar Analyst Rating of Neutral. We acknowledge the merit of integrating environmental, social, and governance factors into a company selection process, especially in emerging markets. However, the best-in-class screening process used by this fund leads to a lack of representativeness and outsize concentration risks.
UBS (Lux) Investment SICAV - China A Opportunity – Silver
Claire Liang
We have initiated UBS (Lux) Investment SICAV - China A Opportunity with a Morningstar Analyst Rating of Silver. Bin Shi is one of the strongest China equity managers in our view, aided by his 25 years of investment experience. He is an astute investor and a strong portfolio constructor, who has consistently impressed us with his knack of identifying winners in their early stages and tactical cash calls during market extremes. He has steadily applied his secular growth-focused, benchmark-unconstrained approach since the strategy launched in March 2007 and has delivered stellar and consistent outperformance despite changes in the market environment. While fees could be lower, we think the strategy has demonstrated plenty of strengths and is one of appealing propositions for investors seeking onshore Chinese equity exposure.
Upgrades
Fidelity Global Multi Asset Income – Silver
Barbara Claus
We have upgraded the Morningstar Analyst Rating of Fidelity Global Multi Asset Income to Silver from Bronze. The fund is one of our favourite multi-asset income strategies. We think that its process is very sound and well-suited to achieve a regular income for investors. It exploits multiple sources of return and excellent execution by accomplished manager Eugene Philalithis, who has managed to keep risks under control. The strategy also benefits from Fidelity’s ample in-house resources, which shows, for example, in the high quality of the underlying strategies.
UBS (Lux) Equity Fund China Opportunity – Silver
Claire Liang
Our conviction in portfolio manager Bin Shi merits an upgrade of UBS (Lux) Equity Fund China Opportunity’s Morningstar Analyst Rating to Silver from Bronze. Bin Shi is one of the strongest China equity managers in our view, aided by his 25 years of investment experience. He is an astute investor and a strong portfolio constructor, who has consistently impressed us with his knack of identifying winners in their early stages and tactical cash calls during market extremes. He has steadily applied his secular growth-focused, benchmark-unconstrained approach since he took the lead in July 2010, and has delivered stellar and consistent outperformance despite the strategy’s growing size and changes in the market environment. While fees could be lower, we think the strategy has demonstrated plenty of strengths and is one of appealing propositions in its group.
