- One rating upgraded
- Ratings retained following reviews post corporate developments
- One rating removed
Analysts at Square Mile Investment Consulting and Research (Square Mile) conducted 139 interviews with investment professionals from 61 asset management groups over the course of January 2022. Based on the intelligence gained at these meetings, and following reviews in the light of corporate announcements, the following actions have been taken.
Wellington Global Impact Bond fund upgraded to Responsible AA rating
Square Mile’s team of investment analysts have upgraded the Wellington Global Impact Bond fund from a Responsible Positive Prospect to a Responsible AA rating. Supported by deep credit resources and a dedicated sustainable research investment team, the fund is delivering strong returns and the analysts believe this to be a high quality, core fixed income approach, with a clear positive social and environmental impact. (Decision as at 31.01.22)
Developments at River & Mercantile Group: all ratings retained
On the 25th of January, the board of River & Mercantile Group (RMG) announced it had recommended an offer from AssetCo PLC to acquire the asset management element of the group, subject to certain conditions. In light of this news, Square Mile confirmed that all ratings awarded to River & Mercantile funds are to be retained. They are as follows:
ES R&M Global Recovery fund – A
ES R&M UK Recovery fund – AA
ES R&M UK Equity High Alpha fund – AA
ES R&M UK Equity Income fund – AA
ES River and Mercantile European fund – Positive Prospect
While Square Mile’s analysts acknowledge this change in ownership to be material at a corporate level, they do not foresee any changes to the underlying philosophy and process applied in the management of these funds. Therefore, they remain comfortable with their ratings, although they will closely monitor RMG’s transition into its new parent company. (Decision as at 26.01.22)
Jupiter Merian Systematic Funds – Change of Duties
As of January 2022, Ian Heslop, co-head of the Jupiter Merian Systematic team, stepped back from the day-to-day management of the team, with co-head Amadeo Alentorn taking over full responsibility of the team.
Mr Heslop will remain at Jupiter and involved in the management of the funds that the team manages in his role as a senior advisor. Mr Alentorn and Mr Heslop have been working together for over 15 years and they are supported by five other analysts who have a wealth of experience.
Due to Mr Heslop’s continued input, the team-based process and the fact that Mr Alentorn has been involved with the funds since December 2004, Square Mile has decided to retain the ratings of the following funds:
Jupiter Merian Global Equity fund – A
Jupiter Merian Asia Pacific fund – A
Jupiter Merian North American Equity fund – A
JGF-Jupiter Merian Global Equity Income fund – A
(Decision as at 18.01.22)
Artemis US Absolute Return fund: A rating removal
Square Mile has taken the difficult decision to remove its A rating from the Artemis US Absolute Return fund. William Warren became the portfolio manager of the fund in October 2019, and Square Mile’s analysts were confident that he could maintain the track record of his predecessor, with whom he had worked closely for more than a decade. Moreover, there was strong evidence that a significant proportion of the fund’s performance prior to October 2019 could be attributed to Mr Warren.
The fund preserved investors’ capital entirely in Q1 2020 when stock markets tumbled. However, that period apart, losses have very slowly mounted and the size of the fund has contracted markedly. Although conditions within the US stock market have been exceptionally challenging for disciplined and traditional stock pickers like Mr Warren, the analysts’ conviction has fallen to a level where they can no longer retain the fund’s rating. (Decision as at 06.01.22)