- Five new ratings, including two Responsible A ratings
- One fund upgraded, one downgraded
- Four reviews away
Analysts at Square Mile Investment Consulting and Research (Square Mile) conducted 45 interviews with investment professionals from 20 asset management groups in April 2021. Based on the knowledge gained at these meetings, the following actions have been taken.
Principal GIF Finisterre Unconstrained Emerging Markets Fixed Income Fund: awarded with A rating
Square Mile analysts have admitted Principal GIF Finisterre Unconstrained Emerging Markets Fixed Income Fund to the Academy of Funds with an A rating. The team points out the fund managers’ innovative approach to investing, particularly the way they break down their investment opportunities by combining different sources of return for income, alpha, momentum and relative value strategies.
The fund provides exposure to the returns of the global emerging market bond universe through a total return approach with an emphasis on hedging against loss. This results in a more conservative, less volatile, solution for investors looking to diversify their fixed income exposure to emerging market bonds. (Decision of April 24th, 21st)
LF Havelock Global Select Fund: Preserved a positive outlook
The Square Mile Research team has awarded the LF Havelock Global Select Fund a positive prospectus rating, reflecting its potential to become a significant competitive offering. Manager Matthew Beddall has a long career in global equity investing, having previously worked at Winton for 17 years. The fund was launched in August 2018 and has so far had a positive track record for its investors. It will likely appeal to investors looking for exposure to a concentrated global value portfolio where the manager uses flexible allocation to limit the fund’s risk, resulting in long-term outperformance. The fund is currently small at around £ 24m and the company is still in its infancy. Therefore, the team will consider the fund for a full rating as the fund and company mature. (Decision of April 19, 21)
JPM Global Bond Opportunities Sustainable Fund: awarded a Responsible A rating
Square Mile has given the JPM Global Bond Opportunities Sustainable fund a Responsible A rating. Analysts believe this is a solid strategic bond strategy, led by an experienced team of investors and backed by the very extensive resources of JP Morgan’s broader fixed income and macroeconomic teams. It offers the benefits of responsible investing through the combination of built-in ESG analysis, a range of exclusions and the application of a “positive bias” towards companies with better ESG profiles or positive momentum and away from the ESG laggards. (Decision of April 13th, 21st)
FP Carmignac European Leaders Fund: awarded a Responsible A rating
Square Mile has accepted the FP Carmignac European Leaders fund with a Responsible A rating in the Academy of Funds. The fund’s manager, Mark Denham, is a seasoned investor who invests in a socially responsible manner and excludes controversial stocks. The strategy focuses on identifying companies that the manager believes have the potential to achieve high and sustainable profitability and that can internally reinvest in their businesses for future growth. In addition, it has a straightforward and robust bottom-up investment process. Although the fund was only launched in May 2019, its relatively short history should not put investors off, as the manager has a long track record of managing money with a previous firm. He also manages Carmignac Portfolio Grande Europe, which has been investing in Europe including the UK since November 2016, and uses a similar investment process. Overall, Square Mile considers this fund to be an attractive and differentiated offer for long-term investors. (Decision of April 9th, 21st)
GAM Star Continental European Equity Fund: awarded with A rating
Square Mile has awarded the GAM Star Continental European Equity Fund an A rating. His manager Niall Gallagher has a long career invested in European stocks and manages the fund with a philosophy of investing in companies that distribute shareholder capital intelligently in order to generate above-average returns. The fund is likely to appeal to investors who want to limit factor exposure to the European equity market and benefit from an experienced manager who selects stocks for long-term outperformance. (Decision of April 7th, 21st)
Matthews Asia ex Japan Dividend Fund: Upgraded from Positive Outlook to AA Rating
Square Mile analysts have upgraded the Matthews Asia ex Japan Dividend Fund from a positive outlook to an AA rating. This upgrade follows the fund’s achievement of a number of milestones since it was introduced to the Academy of Funds in 2018, including a more diversified investor base, growth in underlying assets and a reduction in ongoing charges. (Decision of 04/12/21)
JPM Unconstrained Bond and JPM Global Bond Opportunities Sustainable Funds: Maintain A and Responsible A ratings
Following news that Executive Director Diana Amoa is leaving JP Morgan with immediate effect, Square Mile confirms that the JPM Unconstrained Bond and JPM Global Bond Opportunities Sustainable funds will retain their respective A and Responsible A ratings.
Recognizing the importance of bottom-up selection to the process, Ms. Amoa and three other sector specialists were appointed co-portfolio manager of the JPM Unconstrained Bond fund and JPM Global Bond Opportunities Sustainable fund, which consists of more than 40 dedicated portfolio managers, analysts and traders, in July 2020 , and their contributions to market sentiments and bottom-up selection remain unchanged. The investment process is built on the depth and strength of this team-based culture and Square Mile analysts believe this move will not have a material impact on the funds. (Decision of 04/14/21)
News from BMO Asset Management and Columbia Threadneedle Investments on the proposed acquisition: All ratings retained
Following news of the acquisition of the EMEA business of BMO Asset Management by Ameriprise Financial Inc., Square Mile has decided to keep its ratings for all funds managed by the two groups for the time being.
Ameriprise owns Columbia Threadneedle Investments (CTI) and this is a significant acquisition on their part. Square Mile reviews several funds managed by CTI as well as BMO’s Pyrford Global Total Return Fund and some of their multi-manager strategies. Square Mile believes that this early stage in the process is business as usual for both companies, but analysts will be closely monitoring developments once the details of the acquisition become clearer. The transaction is expected to be completed by the end of the calendar year, subject to regulatory and other approvals. (Decision of April 14, 21)
Trojan Income Fund: Rating downgraded from AA to A.
In response to Francis Brooke’s loss of investment experience as the Trojan Income fund’s lead manager in late 2021, Square Mile downgraded the Trojan Income fund’s rating from AA to A. Square Mile analysts continue to believe that given the strength of the remaining team and their confidence that Blake Hutchins, who will be appointed as of Jan. (Decision of 04/12/21)
ASI MyFolio Market, Managed and Multi-Manager Fund Series: Ratings removed
Following news that Joe Wiggins, Head of Portfolio Management, Matthew Wiles, and Matt Shaw, Investment Analysts, are leaving ASI, Square Mile removed its ratings from the MyFolio Market, Managed and Multi Manager ranges of funds. These departures follow the loss of Bambos Hambi, former Head of Multi Manager Strategies at ASI, to Quilter Investors in June 2020. While Square Mile recognizes the size of the resources that continue to support the product lines, Square Mile’s conviction on the team has waned and has reached a level at which the analysts have decided to remove the ratings from these ranges. (Decision of April 14, 21)
Schroder Sterling Corporate Bond Fund: One rating away
Square Mile lifted the Schroder Sterling Corporate Bond Fund’s A rating after it was announced that its manager, Jonathan Golan, will be leaving the company. While the teamwork is a major asset to the strategy, Square Mile analysts view Mr. Golan as a major contributor to its success over the past few years and a major factor behind their belief in the fund. The process will remain the same, with new managers Julian Houdain and Daniel Pearson taking responsibility for the fund from Mr. Golan and Square Mile continuing to monitor the fund’s progress under the new management. (Decision of April 6th, 21st)