Morningstar OBSR analysts have upgraded their ratings on two global bond funds and downgraded one US equity offering. Premium members can click on a fund name to read the full research report for that fund.
Upgraded: BlackRock Global Funds - Euro Bond
Following the Morningstar OBSR Analyst Ratings Meeting earlier this month, our analysts have upgraded the BlackRock Global Funds Euro Bond fund to Gold from Silver. Morningstar OBSR has a high opinion of the fund manager, Michael Krautzberger, and his ability to marshal the inputs of his large euro fixed income team into a portfolio of diversified relative value positions that are appropriately sized for the fund’s core mandate. This approach has led to relatively consistent outperformance since Krautzberger assumed responsibility for the fund in September 2005 and our analysts have high conviction in his continued ability to deliver such an outcome.
Upgraded: Kames Strategic Global Bond
Kames Strategic Global Bond fund’s Morningstar OBSR Analyst Rating has been upgraded to Silver from Bronze. Our analysts have high regard for fund managers David Roberts and Phil Milburn and their ability to generate and implement high conviction investment ideas from across the fixed income universe. The belief that this has been demonstrated through their management of the product underpins the decision to upgrade the rating.
Downgraded: Goldman Sachs US Equity Portfolio
The Goldman Sachs US Equity Portfolio fund has been downgraded to a Morningstar OBSR Analyst Rating of Neutral from its previous rating of Bronze. The primary reason for the downgrade is due to high staff turnover within the two style-based teams that support this fund. The growth team has had to deal with a number of high-profile departures following its relocation from Florida to New York, while the value team has recently lost an experienced analyst. Our analysts think a Neutral rating is a fairer reflection of the fund's current merits relative to peers.
Initiated: Schroder European
Schroder European fund has been awarded a Morningstar OBSR Analyst Rating of Bronze. Our analysts have a high regard for the fund manager, Martin Skanberg, who has built an impressive track record at the helm of the Schroder European Institutional fund since 2006. (Investors should note that in March 2011 the Schroder European fund merged with Schroder European Institutional fund and was rebranded as Schroder European). He benefits from working closely with Rory Bateman, Head of European Equities, and the Schroder analyst team which has been reinvigorated since Bateman’s arrival in 2008. Morningstar OBSR believes that this is an attractive offering for investors seeking a Europe ex UK fund where the manager is cognisant of the benchmark, but is prepared to take risk at the individual stock level.
Initiated: UBS US Growth
UBS US Growth fund has also been awarded a Bronze rating. The fund is managed by Lawrence Kemp who has been in charge since launch in November 2008. Kemp is also Head of Large Cap Growth Equities at UBS where he has worked since 1992. The manager has been consistent in applying a strategy that characterises growth stocks into three types - classic, elite and cyclical – which is based on the sustainability of a firm’s competitive advantage and return on capital. The well-considered approach has delivered robust relative returns while keeping volatility within reasonable bounds.
