This morning, the Square Mile Academy of Funds have released their fund ratings round-up for February 2023. The details are shown below which show that as well as one new rating being awarded , three funds have been upgraded, one has retained its rating, one fund has had its rating suspended, one’s been downgraded and one has had its rating removed? Where are the movers and shakers? Check out the details below:
Analysts at Square Mile Investment Consulting and Research (Square Mile) have conducted 54 interviews with investment professionals from 38 asset management groups over the course of February 2023. Based on the intelligence gained during these meetings, and following reviews in the light of corporate announcements, the following actions have been taken as regards fund ratings.
New rating
T. Rowe Price Global Impact Credit fund awarded Responsible Positive Prospect
Square Mile’s team of analysts have introduced the T. Rowe Price Global Impact Credit fund into the Academy of Funds with a Responsible Positive Prospect rating. Launched in late 2021, this fund follows a considered thematic approach, investing in issuers whose core economic activities provide solutions to social and environmental challenges. Lead manager Matt Lawton has relevant experience managing credit strategies and is passionate about developing the impact credit strategy, with the support of T. Rowe Price’s wider resources.
Overall, the analysts believe this to be a promising strategy for investors who are seeking positive environmental and social outcomes from their global credit market exposure.
Upgraded ratings
Aegon Strategic Bond fund rating upgraded from Positive Prospect to A rating
Square Mile’s team of fund analysts have upgraded the Aegon Strategic Bond fund from a Positive Prospect to an A rating. Lead managers Alexander Pelteshki and Colin Finlayson have managed this strategy since the end of 2018, adopting an active, high-conviction approach and under their tenure, the fund has delivered an impressive return profile, despite a challenging market backdrop for fixed income over the course of 2022.
Federated Hermes Impact Opportunities Equity fund upgraded from Responsible Positive Prospect to Responsible A rating
Square Mile has upgraded the Federated Hermes Impact Opportunities Equity fund from a Responsible Positive Prospect to a Responsible A rating. Managers Ingrid Kukulijan and Martin Todd adopt a compelling investment approach, centred on investing in companies that provide solutions to societal and environmental problems. Square Mile’s analysts have met regularly with the managers and their supporting analyst team since awarding the fund its initial rating in November 2021. This has increased their conviction in both the strategy and the managers’ capabilities which they feel are better reflected by a Responsible A rating.
Schroder Global Energy Transition fund upgraded from Responsible Positive Prospect to Responsible A rating
The Schroder Global Energy Transition fund has been upgraded from a Responsible Positive Prospect to a Responsible A rating. With a track record dating to July 2019, Square Mile’s analysts see this as a promising long-term offering focussed on investing in companies that are actively involved in the transition to clean energy transition. They have met with the team quarterly since awarding the fund a Responsible Positive Prospect rating in November 2021. Since then, their conviction in the team’s capabilities has grown, bolstered by the fund’s strong relative performance and have therefore upgraded its rating to a Responsible A rating.
Rating retained
JPM Global Macro Opportunities fund: A rating retained
Square Mile’s analysts have reviewed the A rating awarded to the JPM Global Macro Opportunities fund on the news of the resignation of Benoit Lanctot, one of its three portfolio managers. Shrenick Shah, head of the Macro Strategies team and a portfolio manager on the fund since its launch in 2013, will continue to run the fund alongside Josh Berelowitz, a named manager on the fund since December 2019. The analysts will meet the team as part of their ongoing review cycle but they remain comfortable that it is well managed and therefore continues to merit its A rating.
Rating suspended
Artemis Global Select fund: AA rating suspended
Square Mile has suspended the AA rating on the Artemis Global Select fund following the recent announcement that portfolio manager Simon Edelsten is to retire at the end of 2023 and co-manager Alex Illingworth will leave the business at the end of February.
Artemis has hired Alex Stanic from JP Morgan as Head of Global Equities and he will manage the fund alongside Mr Edelsten until the end of the year. Square Mile’s analysts will meet with Mr Stanic in the coming weeks to discuss how the fund will be managed in future and will provide an update in due course.
Rating downgraded
BlackRock Gold & General fund: rating downgraded from AA to A
Square Mile’s analysts have downgraded the rating of the BlackRock Gold & General fund from AA to A. Whilst they retain conviction in the fund based on the strength and depth of its investment team, it continues to underperform versus the FTSE Gold Mines Index. To be UCITs compliant, the fund must have underweight exposure to the largest three companies in the index which can accentuate relative performance both on the up and downside. Therefore, the team feels an A rating better reflects their conviction in this fund’s ability to provide a long-term return in line with the FTSE Gold Mines index.
Rating removed
Ninety One UK Alpha fund: A rating removed
Ninety One has announced that Simon Brazier, co-head of the Quality Investment Team, is to leave the business at the end of May. Responsibility for the Ninety One UK Alpha fund will pass to Mr Brazier’s existing co-manager Anna Farmbrough and newly appointed co-manager Ben Needham at the end of March.
While Square Mile’s analysts acknowledge Ms Farmbrough’s continued association on the strategy, the fund’s A rating was predicated on Mr Brazier’s involvement as the architect of the approach. Therefore, the analysts believe that removing the fund’s rating to be the most appropriate action while they monitor how the strategy is managed by Ms Farmbrough and Mr Needham in future.
