Morningstar Fund Ratings Round-up

A raft of funds are downgraded, including Mark Barnett's Invesco Income, as the first batch are examined under the enhanced Morningstar Analyst Rating methodology

Jeffrey Schumacher 19 November, 2019 | 9:14AM

analyst rating

New Ratings

Guardcap Global Equity - Silver

Jeffrey Schumacher

GuardCap Global Equity's talented and cohesive team combined with an impressively rigorous bottomup process give this fund an edge. We initiate coverage with a Morningstar Analyst Rating of Silver for its clean I-share class. Ratings for other share classes range from Gold to Bronze. The fund is led Michael Boyd and Giles Warren, two veteran quality-growth investors who run the fund since its 2014 inception and ran a similar strategy since 1996 at their previous employer. They are supported by two dedicated analysts, which makes it a compact team with high key-person risk, however, their dedication, deep knowledge, and collaborative approach set them apart. Another strength of this fund is its wellstructured, intensive, and thorough bottom-up research process. The philosophy adheres to strict quality and growth criteria but is also mindful of valuations. Only a small number of companies are meticulously and patiently analysed. The intensity of research increases as a company progresses through the various stages of the process. The research is documented in detailed reports, which are heavily debated and challenged, even after a stock enters the portfolio. The portfolio consists of 20 to 25 stocks, which puts the managers' highest convictions on full display. This fund's track record is relatively short, but it's quite convincing as it has done an outstanding job managing downside risks.

Upgrades

BGF World Financials - Bronze from Neutral 

Samuel Meakin

BGF World Financials' experienced manager, backed by a good level of analytical resource, and a clearly defined process mean that there are several positives here. The continued consistent implementation of the approach has increased our level of conviction. We have upgraded the strategy’s clean D2 share class to a Morningstar Analyst Rating of Bronze from Neutral. Other cheaper share classes also earn a Bronze rating, while more expensive classes are rated Neutral.

Downgrades

Edinburgh Investment Trust - Neutral from Silver

Peter Brunt 

The increasing number and nature of stock-selection issues over a prolonged period have raised concerns about the manager's implementation of the investment approach. Further, within our new ratings framework, which places a greater focus on overall costs, the interest charges on the trust's debt facilities make it a less competitive offering. As a result, the Morningstar Analyst Rating is lowered to Neutral from Silver.

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About Author

Jeffrey Schumacher  is a Fund Analyst with Morningstar Benelux.

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