Morningstar Fund Ratings: Weekly Round-up

Our weekly round-up of changes to funds' Morningstar Analyst Ratings includes three upgrades to Gold

Jeffrey Schumacher 9 June, 2020 | 1:37PM
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JPM US Value – Gold from Silver

Jeffrey Schumacher

JPM US Value benefits from a long-tenured manager and a proven quality-oriented value approach. In June 2019, Clare Hart took the helm and transformed the fund to match the philosophy and style applied at US-domiciled JPMorgan Growth and Income, which she has managed successfully since March 2004. In 2019, Hart added Andrew Brandon and David Silberman to the management squad. In addition to a core portfolio of reasonably valued quality stocks, it includes some undervalued, lower quality names whose cash flows, earnings, balance sheets, and operating environments are improving and therefore offer a good risk/reward trade-off.

Overall we believe the process is robust and has been well-executed. Under our enhanced ratings framework, which places a greater focus on fees and expected benchmark-relative performance, the Morningstar Analyst Rating for the fund is upgraded to Gold for its cheapest share classes, while more expensive ones land at Bronze or Neutral.

BlackRock Emerging Markets – Silver from Bronze

Andrew Daniels

Gordon Fraser took over BlackRock Emerging Markets in March 2017 and relocated to Hong Kong from London shortly thereafter. Fraser, who joined BlackRock in 2006 as an analyst, has 13 years of investment experience and started comanaging BlackRock Emerging Frontiers – a hedge fund with a similar investment universe – in 2011. Fraser isn’t as experienced as some peers, but he not only comes across as a savvy and passionate investor but also delivers sound top-down and bottom-up insights. Fraser executes a style-agnostic approach by blending top-down and bottom-up research, with the goal of outperforming across market environments. Fraser developed a global emerging-markets macroeconomic dashboard, which provides a country allocation framework for the strategy, then leverages the fundamental analyst team to build this 50- to 70-stock portfolio.

Not only has Fraser adhered to the approach across market environments, but he has also consistently demonstrated solid intuition while leveraging BlackRock’s full suite of quantitative tools and analytical resources. These factors instill confidence that strong returns are repeatable with Fraser at the helm. As a result, the UK vehicle’s cheapest share class merits a Morningstar Analyst Rating of Silver, while its more expensive share classes – including the D Acc clean share class – earn Bronze ratings.

Dodge & Cox Worldwide Global Bond – Gold from Silver

Patrick Ge

Launched in 2014, Dodge & Cox Worldwide Global Bond is the UCITs vehicle of Dodge & Cox Global Bond and is built on the same foundations featured in Dodge & Cox Income (DODIX), which has a Morningstar Analyst Rating of Gold: a patient and disciplined strategy, strong and experienced leadership, and attractive fees. We therefore retain the fund’s Above Average People and High Process Pillar ratings. Under our enhanced ratings framework, which puts more focus on fees and expected benchmark-relative performance, the strategy’s Morningstar Analyst Rating was upgraded to Gold from Silver across all share classes.

Polar Capital Global Insurance – Gold from Silver

Samuel Meakin

The knowledge and experience in place on Polar Capital Global Insurance provide high-quality coverage of the niche sector to investors. The team has clearly demonstrated the ability to build concentrated but suitably diversified portfolios that have navigated the subsectors of the insurance industry well over time. Under our enhanced ratings framework, which places a greater emphasis on fees and expected benchmark-relative performance, the Morningstar Analyst Rating for the I share class is upgraded to Gold from Silver. Other share classes range from Gold to Silver, dependent on cost.


Invesco Global Bond – Neutral from Bronze

Evangelia Gkeka

Invesco Global Bond is managed by Stuart Edwards, who is supported by deputy Jack Parker. It actively allocates across global-sovereign and corporate credit, rate, and currency markets based on macro, credit, and value assessments. Its benchmark-agnostic nature means there are no formal limits on country, sector, currency, and cash weightings and provides more flexibility compared to most peers. The effective use of this flexibility over time leads to an Above Average Process Pillar rating.

However the People Pillar rating is lowered from Above Average to Average as resources are relatively thin in this multifaceted asset class when compared to peers in this competitive category. Since Edwards took over the management of the strategy it has underperformed its peers and benchmark but outperformed on a risk-adjusted basis due to its lower volatility and lower downside capture. As a result, the Morningstar Analyst Rating for the strategy’s clean share class (Z Acc) is lowered from Bronze to Neutral. All other share classes are also rated Neutral.

Note: under the Morningstar methodology 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.

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About Author

Jeffrey Schumacher  is a Fund Analyst with Morningstar Benelux.

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