- Three new ratings awarded
- One rating suspended
- One rating downgraded
- Two ratings removed
Analysts at Square Mile Investment Consulting and Research (Square Mile) conducted 59 interviews with investment professionals from 34 asset management groups over the course of September 2022. Based on the intelligence gained at these meetings and following reviews in the light of corporate announcements and developments, the following actions have been taken.
Guinness Sustainable Energy fund is awarded a Responsible A Rating
Square Mile’s team of analysts have introduced the Guinness Sustainable Energy fund to the Square Mile Academy of Funds (the Academy) with a Responsible A rating. In particular, they highlighted the strategy’s tightly knit and dedicated team that have strong expertise of investing in the broader energy sector. Square Mile believes this strategy should appeal to investors who wish to accumulate capital over the long term whilst also playing a role in global decarbonisation. (Decision as at 26.09.22)
Aviva Multi Asset Funds Core Range awarded Positive Prospect Ratings
The Aviva Multi Asset Funds (MAF) Core Range enters the Academy with Positive Prospect ratings. The analysts consider the investment process that the team follows, which combines a low-cost and globally orientated approach with ESG integration, to be a differentiated proposition compared to many peers. Additionally, they believe these funds play to Aviva Investors’ core capabilities and elements of the business where it has significant resource and a strong heritage, namely multi-asset solutions and responsible investing. (Decision as at 13.09.22)
BlueBay Impact Aligned Bond fund awarded a Responsible Positive Prospect rating
Square Mile has introduced the BlueBay Impact Aligned Bond fund into the Academy with a Responsible Positive Prospect rating. This fund follows a thematic approach, investing in issuers whose core economic activities provide solutions to social and environmental challenges. Having launched in May 2021, Square Mile’s analysts believe the fund benefits from a strong fixed income team and a credible sustainability process. In Square Mile’s view, this fund offers a distinct approach to achieving positive environmental and social outcomes by investing in global credit markets. (Decision as at 01.09.22)
CT UK Equity Income fund: AA rating suspended
Square Mile’s analysts have suspended the AA rating on the CT UK Equity Income fund on the news that lead manager Richard Colwell is to retire. With effect from November 2022, management of the fund will be passed to Jeremy Smith, Head of UK Equity Research at Columbia Threadneedle Investments, alongside current deputy manager, Jonathan Barber. The analysts will meet Mr Smith in the coming weeks to discuss how the strategy will be managed in future and will provide an update in due course. (Decision as at 29.09.22)
abrdn UK Smaller Companies fund downgraded to an A rating
Square Mile’s team of analysts have downgraded the abrdn UK Smaller Companies fund to an A rating given the upcoming retirement of lead manager Harry Nimmo and subsequent loss of his investment experience. The analysts continue to believe that the fund warrants a place within the Academy on the strength of its remaining team members and their confidence that Abby Glennie, who becomes the fund’s lead manager from 31st December 2022, will continue to apply their long-standing investment approach.
Square Mile would like to take this opportunity to recognise Mr Nimmo’s contribution to the industry and wish him a long and happy retirement. (Decision as at 14.09.22)
Matthews Asia Dividend fund leaves Academy of Funds
Square Mile’s analysts have conducted a review of the rated Asian equity funds within the Academy and have taken the decision to remove the Matthews Asia Dividend fund. This reflects the fact that fund and its sector (Asia including Japan) have not attracted significant investor interest in recent years. However, Square Mile has retained the AA rating held by the Matthews Asia ex Japan Dividend version of this strategy which continues to enjoy demand from investors. (Decision as at 26.09.22)
Franklin UK Equity Income fund loses A rating
On the news that Head of UK Equities and long-standing fund manager Colin Morton will retire at the end of 2022, Square Mile has taken the difficult decision to remove the Franklin UK Equity Income fund’s A rating. Current co-lead manager Ben Russon will assume responsibility for the strategy, and while Square Mile’s analysts acknowledge his experience and track record in running UK equities, the fund’s rating was centred on Mr Morton’s involvement. Moreover, given Mr Russon’s additional future responsibilities, both as a lead manager and co-head of the UK Equity team, they would like time to assess how these changes settle in over the coming months.
Square Mile would like to take this opportunity to recognise Mr Morton’s contribution to the industry and wish him a long and happy retirement. (Decision as at 06.09.22)