UK Equity Funds Downgraded, Japanese Equity Funds Upgraded

Find out which funds have recently been rated, upgraded and downgraded by Morningstar OBSR analysts

Holly Cook 31 August, 2012 | 3:25PM
Facebook Twitter LinkedIn

A UK equity growth fund and a UK equity income offering from Standard Life have both recently been downgraded by Morningstar OBSR analysts, while two funds offering exposure to Japanese equities have achieved upgrades. Meanwhile, Fidelity Moneybuilder Dividend has been added to our coverage.

Jupiter Japan Income has been upgraded by Morningstar OBSR analysts to Silver from Bronze. They see the fund as a strong proposition for an investor’s allocation to the Japanese market. Simon Somerville, an experienced manager, is a methodical and sensible stock-picker who takes account of market sentiment and the broader macroeconomic environment. 

Schroder Tokyo has also been upgraded to Gold from Silver. The fund is managed by Andrew Rose, a veteran Japanese equity investor, who is supported by a strong team of analysts and portfolio managers based in Tokyo. The new Gold rating reflects our analysts’ high regard for the manager’s investment prowess and consistent process, which has delivered attractive risk-adjusted returns to investors over time. 

Henderson Multi-Manager Active was previously Under Review by Morningstar OBSR analysts and has now been downgraded to Neutral. It formerly held a Bronze Rating. Our analysts hold the multi-manager team at Henderson, headed by Bill McQuaker, in high regard and acknowledge that this is an inherited fund so the long-term track record has not been built up by the current team. However, our analysts say they have stronger conviction in the team’s ability to manage their more cautious mandates and note that they have yet to make a significant impact on the performance of this fund since taking over in February 2011. Neutral is therefore seen as a more appropriate rating for now. 

Martin Currie Japan, meanwhile, has been downgraded to Neutral from Bronze as conviction in the fund has diminished following deterioration in the fund’s performance profile over a protracted period of time. Performance is just one of the factors considered during our research and rating process, the others being People, Process, Parent and Price. Read our methodology here

Both Standard Life Investments UK Equity Growth and Standard Life Investments UK Equity High Income havesuffered downgrades, sliding to Bronze from Silver. The funds are managed by the experienced Karen Robertson, who diligently applies Standard Life Investment’s investment process, but performance has been disappointing in both cases, given the degree of risk taken in the management of the fund. Morningstar OBSR analysts still see both funds in a positive light but they believe a Bronze Rating is currently a better reflection of their conviction. 

New Rating
Fidelity Moneybuilder Dividend has been awardeda Bronze Analyst Rating. The fund, which is managed by Michael Clark, is in the Morningstar UK Equity Income category and targets an income that can grow over the long term and will remain more than 110% above the FTSE All-Share index. Clark has over 25 years of investment experience predominantly as an equity research analyst. He has been managing this fund for the last four years and diligently implements the process, which focuses on buying companies that are able to sustainably grow their dividends, to provide investors with a high and stable income.

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.

Facebook Twitter LinkedIn

About Author

Holly Cook

Holly Cook  is Manager, Morningstar EMEA Websites