New Fund Ratings from Morningstar OBSR

Morningstar OBSR analysts have bestowed new Bronze ratings onto six funds, including two BlackRock funds run by Vincent Devlin

Alanna Petroff 5 December, 2012 | 6:00AM
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Morningstar OBSR analysts have recently initiated coverage and given Bronze ratings to six funds. The Bronze ratings indicate that the analysts are optimistic about future performance for each of these funds over the long term. 

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Aberdeen World Growth & Income
Rating: Bronze
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This fund "is a good offering for investors seeking income from global equities," said Morningstar OBSR analyst Richard Whitehall in his new research report.

"The fund aims to deliver a yield of 4% along with capital growth, with the target to outperform the MSCI World index over rolling 3-year periods. The fund benefits from an established and successful management team led by Stephen Docherty," stated Morningstar OBSR in a recent report.

Docherty also manages the Silver-rated Aberdeen World Equity fund, which is amongst the five most viewed funds on

BlackRock European Absolute Alpha
Rating: Bronze
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"This fund is invested in long and short European equities and aims to deliver an absolute return across all market environments," stated Morningstar OBSR in a recent report. "The fund’s rigorous process has served investors well since launch and we consider this is a compelling offering for investors seeking an absolute return fund."

This fund is managed by Vincent Devlin, who also runs the Silver-rated BlackRock Continental European fund.

BlackRock Strategic Fund (BSF) European Absolute Return
Rating: Bronze
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This fund is similar to the above BlackRock European Absolute Alpha fund: it is also run by Vincent Devlin and it also invests in long and short European equities in an effort to deliver absolute return.

"Since launch [to October 31, 2012,] the fund has delivered strong absolute returns, delivering 5.0% per year on an annualised basis, which is considerably ahead of its benchmark ... More pleasingly this has been achieved with lower volatility," stated Morningstar OBSR analyst Emma O'Neill in her fund research report.

JPM Global Aggregate Bond
Rating: Bronze
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"We believe this fund is a strong choice for investors seeking unhedged exposure to global investment grade bonds," said Morningstar OBSR analyst Anthony McDonald in his research report.  

"Global aggregate funds can be attractive at the core of an investor's fixed-income exposure. It should nevertheless be noted that this fund is unhedged and a different vehicle is available for clients seeking currency-hedged bond exposure," said McDonald.

The fund is co-managed by Jon Jonsson and Iain Stealey.

Liontrust UK Growth
Rating: Bronze
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This fund mainly invests in UK large- and mid-cap companies and is managed by Anthony Cross and Julian Fosh, who also run the Bronze-rated Liontrust Special Situations and the Bronze-rated Liontrust UK Smaller Companies funds.

All three of these  funds use a similar investment philosophy and process. "The process is based on Cross' proprietary research and emphasises the importance of intellectual property and other intangible strengths. The process dates back to 1997, but has continued to be updated and refined since Cross joined forces with Fosh," said Morningstar OBSR analyst Richard Whitehall.

M&G European Corporate Bond
Rating: Bronze
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"We consider this a compelling offering for investors seeking exposure to European investment grade credit," says Morningstar OBSR.

The fund has been managed by Stefan Isaacs since April 2007. 

"He has a strong knowledge of the European fixed-interest market and is able to draw on the support of deputy manager, Richard Woolnough, who is one of the more experienced fixed-income managers in the industry," stated Marianne Weller in her research report.

"Despite a total expense ratio (TER) that is higher than the category median, we believe Isaacs' experience, backed by the resources of M&G and a straightforward but robust process, makes this a solid long-term offering," said Weller.

Understanding Morningstar's Analyst Ratings

Morningstar’s analyst fund ratings range from Gold to Negative. The ratings indicate whether Morningstar analysts are optimistic about a fund’s future performance. A Gold rating indicates Morningstar analysts think highly of a fund and expect it to outperform its peers and relevant index over a full market cycle of at least five years. Silver and Bronze ratings also indicate positive sentiment from Morningstar analysts. A Neutral rating indicates that Morningstar analysts believe a fund isn’t likely to deliver standout returns but also isn’t likely to significantly underperform. A Negative rating indicates Morningstar analysts believe the fund is inferior compared to its peers and has at least one flaw that is likely to significantly hamper future performance.

To learn more about the qualitative Morningstar analyst rating system, watch this video

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

Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.