Morningstar Fund Ratings: Weekly Round-up

The latest batch of Morningstar fund rating changes features three new ratings for BlackRock, Fidelity and Trojan

Fatima Khizou 13 October, 2020 | 9:08AM
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Fund Ratings

New Ratings

BlackRock UK Smaller Companies – Silver

Fatima Khizou

BlackRock UK Smaller Companies benefits from an experienced manager, supported by a team of capable managers, and a structured approach. Manager Roland Arnold, who has been at the helm here since March 2015, targets quality growth firms that are undervalued relative to their growth potential. Detailed stock research and analysis is centred around five main criteria that aim to assess and understand the key determinants of a company’s potential to grow value: strong management, strong market position, cash generation, strong balance sheet, and good long-term track record. The approach has been consistently applied and has been proved to add value over the long term. We have initiated coverage with a Morningstar Analyst Rating of Silver for the D clean share class. Ratings for other share classes range from Bronze to Silver. 

Fidelity Emerging Market Debt – Bronze

Patrick Ge

We have initiated coverage on Fidelity Emerging Market Debt. This strategy is led by Eric Wong, who has been a comanager here since November 2012 before being named lead manager in January 2019, following prior lead Steve Ellis’ promotion. Wong came across as an articulate and passionate investor, and we are further reassured by the strong track records on his other emerging-markets debt and Asian bond strategies. On the other hand, Paul Greer and Marton Huebler, who were added as comanagers in October 2018 and July 2019, respectively, are newly minted portfolio managers and do not have a prior track record of managing money. The trio is supported by a well-resourced and stable 29-member global research team, though we’re keeping an eye on the recent uptick in turnover within Asia.

The team executes a clearly defined investment framework that has been proved over time, and Wong’s presence since 2012 ensures its consistent application. We have initiated the People Pillar rating at Average and the Process Pillar rating at Above Average. Under our enhanced ratings framework, which places a greater focus on fees and benchmark-relative performance, the strategy earns a Morningstar Analyst Rating of Bronze for its cheaper share classes including the Y-Acc clean share class, while its more expensive shares are rated Neutral.

Trojan Global Income – Silver

Jeffrey Schumacher

The combination of a seasoned dividend investor who’s backed by a group of likeminded investors with a proven and long-term focused approach give Trojan Global Income an edge. James Harries has been the fund’s skipper since its inception in November 2016. Although his record at Troy is short, he is a proven dividend investor. At his previous employer, Newton, he ran the firm’s global equity income fund for 10 years and built a convincing track record. Quality, concentration, and low turnover are key words to describe this approach. This quality tilt, combined with a defensive stance, has helped the fund to shine in rough markets. The fund’s downside resilience and preference for reliable dividend payers that are reasonably valued has led to a solid track record since inception. We initiate coverage with a Morningstar Analyst Rating of Silver for the fund’s cheapest share classes including the clean O Acc share class, while more expensive ones are rated Bronze.

Note: Under Morningstar's ratings methodology, different share classes of a fund may have a different rating

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

Fatima Khizou  is an Investment Research Analyst for Morningstar