- Four new ratings awarded, including one Responsible A rating
- Two ratings retained, two funds leave the Academy of Funds
Analysts at Square Mile Investment Consulting and Research (Square Mile) conducted 80 interviews with investment professionals from 47 asset management groups over the course of November 2023. Based on the intelligence gained during these meetings, and following reviews in the light of corporate announcements, the following actions have been taken.
New ratings
Wellington Global Impact fund awarded Responsible A Rating
Square Mile’s team of analysts have introduced the Wellington Global Impact fund into the Academy of Funds with a Responsible A rating. Launched in 2016, the fund invests in companies that its managers deem are providing sustainable solutions to the biggest environmental and social problems facing the global economy. The fund’s lead portfolio manager is Jason Goins, with Tara Stilwell as his deputy.
Square Mile believes the investment philosophy and process developed by Wellington in this strategy deliver a clear positive social and environmental impact. In addition, the analysts feel the fund’s emerging markets exposure offers differentiation amongst its peer group. (Decision as at 20.11.23)
Aegon High Yield Bond fund awarded A Rating
Square Mile has awarded an A rating to the Aegon High Yield Bond fund. The fund is co-managed by the impressive Tom Hanson and Mark Benbow, supported by Aegon’s wider fixed income franchise. The analysts note that this pair have consistently outperformed the wider market during their tenure on the fund. (Decision as at 8.11.23)
abrdn Global Government Bond Tracker fund awarded Recommended Rating
Square Mile has awarded a Recommended rating to the abrdn Global Government Bond Tracker Fund. This fund tracks the JP Morgan GBI Global Index (Hedged GBP) Index which represents global developed government bonds. Broadly half of the index consists of government bonds from the US with a further 20% from Japan. UK government bonds represent five to seven per cent of the index. The duration of the index over time should be broadly six to eight years. Since launch the fund has tracked its benchmark to within an acceptable range, and the analysts believe the fund represents fair value for money. (Decision as at 3.11.23)
Aubrey Global Emerging Markets Opportunities fund awarded A Rating
Square Mile has introduced the Aubrey Global Emerging Markets Opportunities fund to the Academy of Funds with an A rating. The analysts believe this to be an attractive proposition for long-term investors seeking a differentiated exposure to the region. The fund is run by an experienced team of portfolio managers who apply a distinct and sensible approach that focusses on identifying companies that they believe can benefit from the growing consumer wealth across emerging markets. (Decision as at 1.11.23)
Ratings retained
Artemis Corporate Bond fund retains AA rating
Square Mile confirms that, despite the recently announced departures of Juan Valenzuela and Rebecca Young from Artemis’s fixed income team, the Artemis Corporate Bond fund will retain its AA rating. Mr Valenzuela and Ms Young were co-managers of the Artemis Strategic Bond fund but the analysts believe the impact on the management of the Artemis Corporate Bond fund will be minimal. They maintain their high regard for Stephen Snowden and Grace Le, whose nimble, active approach has delivered a strong track record for the fund since its inception. (Decision as at 3.11.23)
Tellworth UK Smaller Companies fund retains A rating
Square Mile’s analysts reviewed the Tellworth UK Smaller Companies fund on the announcement that Premier Miton is to acquire Tellworth Investments, and confirm that it will retain its A rating. This deal is subject to FCA approval and is expected to complete in early 2024. The intention is for the Tellworth team to transition into the Premier Miton business over the second half of next year. Square Mile will provide further updates in due course but in the meantime, the analysts do not envisage any change to the way in which the fund will be managed. (Decision as at 2.11.23)
Ratings removed
Baillie Gifford High Yield Bond fund loses A rating
Following a review of the sector in which the fund sits, Square Mile has decided to remove the A rating from the Baillie Gifford High Yield Bond fund. The fund’s relative performance has disappointed for several years, which has led to a loss in the analysts’ overall conviction in the fund, particularly in light of its increasingly competitive peer group. (Decision as at 8.11.23)
EdenTree Responsible & Sustainable UK Equity fund loses A rating
On the recent news Katen Patel, who has been at EdenTree since 2003 and who has been the lead manager of the EdenTree Responsible & Sustainable UK Equity fund since September 2016 has left the business, Square Mile, after careful consideration, has taken the difficult decision to remove the fund’s A rating. From early November the fund will be managed by Greg Herbert and whilst the analysts do not envisage a significant deviation in the underlying investment philosophy, they believe that Mr Herbert will apply a different approach and would therefore prefer to see how these changes bed in. (Decision as at 2.11.23)
