Morningstar Fund Ratings Round-up

This week sees upgrades for five Schroder funds and downgrades for five Aberdeen Standard funds

Germaine Share 10 December, 2019 | 3:00PM

analyst rating

New Ratings

Investec Diversified Income – Bronze

Rajesh Yadav

We initiate coverage of Investec Diversified Income with a Morningstar Analyst Rating of Bronze for its clean I-share class. The rating for the more expensive A share class is Neutral. While the history of this strategy since its launch in 2012 is not the longest, we like its well-structured investment process, executed by a solid management team. Investec’s above-average stewardship and below-average fees are additional positives.

Upgrades

Schroder China Opportunities – Gold

Germaine Share

Schroder China Opportunities has been led by Schroders veteran and Greater China equity expert Louisa Lo since August 2013. She is one of our favourite portfolio managers in the asset class, and she has produced stellar track records across her managed products. She has been actively building out the team’s China A-shares research capability, which provides another competitive edge as the onshore Chinese market becomes a bigger part of the investable universe. We have also further strengthened our conviction in the team’s quality-growth-focused investment process, which has been proved over multiple market cycles. Overall, the strengths of the strategy’s People and Process Pillars warrant a Morningstar Analyst Rating upgrade to Gold from Silver.

Schroder ISF China Opps C Acc USD – Gold

Germaine Share

Schroder ISF China Opportunities has been led by Schroders veteran and Greater China equity expert Louisa Lo since August 2013. She is one of our favourite portfolio managers in the asset class, and she has produced stellar track records across her managed products. She has been actively building out the team’s China A-shares research capability, which provides another competitive edge as the onshore Chinese market becomes a bigger part of the investable universe. We have also further strengthened our conviction in the team’s quality-growth-focused investment process, which has been proved over multiple market cycles. Overall, the strengths of the strategy’s People and Process Pillars warrant a Morningstar Analyst Rating upgrade to Gold from Silver across all its share classes.

Schroder ISF Emerging Asia C Acc USD – Gold

Germaine Share

Schroder ISF Emerging Asia has been led by Schroders veteran and deputy head of Asia ex-Japan equities Louisa Lo since January 2002. We believe her expertise in Greater China equities lends itself well in managing this Asian equity mandate. Indeed, she has produced stellar track records across her Greater China and Asian equity products. We have also further strengthened our conviction in the team’s quality-growth-focused investment process, which has been proved over multiple market cycles. Overall, the strengths of the strategy’s People and Process Pillars warrant a Morningstar Analyst Rating upgrade to Silver from Bronze on its clean share class. Its other share classes range from Gold to Bronze.

Schroder ISF Greater China C Acc USD – Gold

Germaine Share

Schroder ISF Greater China has been led by Schroders veteran and Greater China equity expert Louisa Lo since September 2002. She is one of our favourite portfolio managers in the asset class, and she has produced stellar track records across her managed products. She has been actively building out the team’s China A-shares research capability, which provides another competitive edge as the onshore Chinese market becomes a bigger part of the investable universe. We have also further strengthened our conviction in the team’s quality-growth-focused investment process, which has been proved over multiple market cycles. Overall, the strengths of the strategy’s People and Process Pillars warrant a Morningstar Analyst Rating upgrade to Gold from Silver on its clean share class, while some of the more expensive share classes land at Silver.

Schroder ISF Taiwanese Equity C Acc USD – Gold

Germaine Share

Schroder ISF Taiwanese Equity has been led by Schroders veteran and Greater China equity expert Louisa Lo since January 2001. She is one of our favourite portfolio managers in the asset class, and she has produced stellar track records across her managed products. While the team no longer has any dedicated Taiwan analysts, we believe the strategy continues to be well-supported by the 16-member Greater China equity team. We have also further strengthened our conviction in the team’s quality growth-focused investment process, which has been proved over multiple market cycles. Overall, the strengths of the strategy’s People and Process Pillars warrant a Morningstar Analyst Rating upgrade to Gold from Silver across all its share classes.

Downgrades

Aberdeen Standard Emerging Markets Equity UK – Neutral 

Andrew Daniels

Aberdeen Standard Emerging Markets Equity benefits from an experienced, proven, and well-resourced team, although an evolving investment approach gives us pause. Under our enhanced ratings framework, which places a greater focus on fees and benchmark-relative performance, the vehicle’s cheapest share classes earn Morningstar Analyst Ratings of Bronze, while its more expensive share classes – including the I Acc clean share class – fall to Neutral.

Aberdeen Standard Emerging Markets Equity LUX – Neutral

Andrew Daniels

Aberdeen Standard Emerging Markets Equity benefits from an experienced, proven, and well-resourced team, although an evolving investment approach gives us pause. Under our enhanced ratings framework, which places a greater focus on fees and benchmark-relative performance, the vehicle’s cheapest share classes earn Morningstar Analyst Ratings of Bronze, while its more expensive share classes – including the X Acc USD clean share class – fall to Neutral.

Aberdeen Standard Asia Pacific Equity UK – Neutral

Andrew Daniels

Aberdeen Standard Asia Pacific Equity benefits from an experienced, proven, and well-resourced team, although an evolving investment approach gives us pause. Under our enhanced ratings framework, which places a greater focus on fees and benchmark-relative performance, the vehicle’s cheapest share class earns a Morningstar Analyst Rating of Bronze, while its more expensive share classes – including the I Acc clean share class – fall to Neutral.

Aberdeen Standard Asia Pacific Equity – Neutral

Andrew Daniels

Aberdeen Standard Asia Pacific Equity benefits from an experienced, proven, and well-resourced team, although an evolving investment approach gives us pause. Under our enhanced ratings framework, which places a greater focus on fees and benchmark-relative performance, the vehicle’s cheapest share classes earn Morningstar Analyst Ratings of Bronze, while its more expensive share classes – including the X Acc USD clean share class – fall to Neutral.

Aberdeen Standard Asia Pacific and Japan Equity – Neutral

Andrew Daniels

Aberdeen Standard Asia Pacific and Japan Equity benefits from an experienced, proven, and well-resourced team, although an evolving investment approach gives us pause. Under our enhanced ratings framework, which places a greater focus on fees and benchmark-relative performance, the vehicle’s Morningstar Analyst Ratings fall to Neutral from Bronze across all share classes.

Note: Under the enhanced Morningstar Analyst Rating different share classes of funds may have different ratings

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.

About Author

Germaine Share  is a Senior Analyst for Morningstar

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