Autumn 2021: the funds gaining and losing their Elite Ratings

Following FundCalibre’s autumn investment committee, three funds have gained an Elite Rating from FundCalibre, as have three previously ‘Radar’ funds that now have a three-year track record. An investment trust has also been awarded a new Elite Radar badge, while one fund has lost its rating due to a manager change.

Three funds gain an Elite Rating:

Allianz China A-Shares    

“This fund invests purely in the Chinese A share market, which is very large and very inefficient, providing great opportunities for active portfolios. It is run by a very experienced and well-resourced team, which has been operating in the Chinese A share market far longer than most of its competitors. The managers target sustainable growth businesses at reasonable valuations, and we like the ‘Grassroots’ research which gives the team an extra edge in the region.”

Matthews Asia ex Japan Dividend

“This fund blends stocks exhibiting dividend growth with more stable, established yielders. It invests across the region in firms of all sizes and will have a significant proportion in medium and small-sized companies. Whilst many other dividend funds have struggled in the past, this fund has shown why dividends continue to make up a critical part of investors’ total returns. The final yield is an outcome of the process, rather than a target. For this reason, the yield on the fund is often lower than many of the fund’s Asian income peers.”

Rathbone UK Opportunities

“This is a flexible fund targeting quality growth businesses. The manager looks to take advantage of cheap UK valuations, but avoids the ex-growth, large-cap dinosaurs. She combines structural winners with a strong core of high-quality compounders and the final portfolio consists of around 50 to 60 holdings, with a bias to mid-cap stocks. Alexandra is an exciting up and coming UK fund manager and has worked on this strategy since its inception in 2014. The fund’s low annual charge of just 0.45% is also attractive for investors.”

One trust gains an Elite Radar:

Schroder British Opportunities

“One of the few products to be launched in response to the Covid-19 pandemic, the Schroder British Opportunities trust seeks to tap into the unloved status of UK equities by targeting companies which have been in the eye of the storm. The portfolio consists of 30-50 small and medium-sized public and private businesses requiring fresh injections of equity, with the trust aiming to provide a net asset value total return of 10% per annum.”

Three funds with three-year track records move from Radar to Rated

FTF Martin Currie European Unconstrained

“This fund offers a focused, high conviction portfolio of quality growth European equities, with no constraints on regional or country allocations. Manager Zehrid Osmani, who took on the fund in 2018, takes a long-term approach and his belief is that it’s important to avoid short-term noise and focus on a 5 to 10-year time horizon. He has considerable experience of investing in this way and a strong track record from his days managing similar funds at BlackRock. This fund has also performed very well over his tenure.”

Rathbone Greenbank Global Sustainability

“This is a high conviction global equity fund that has a bias towards mid-caps. Manager David Harrison focuses on selecting stocks with strong cash generation and will actively avoid businesses involved in unethical or unsustainable practices. The exclusion criteria are alcohol, animal testing, armaments, extraction of fossil fuels, gambling, nuclear power, pornography, tobacco and poor employment, environment and/or human rights practices. Each holding will also have to have at least one positive environmental, social or governance attribute. It comfortably passed the AlphaQuest screen over three years and has been moved from an Elite Radar to an Elite Rating.”

TM CRUX UK Special Situations

“This fund invests in UK companies of all sizes, but will typically have more of a focus on medium and smaller companies than many of its peers. In addition, there will be some FTSE 100 names and a few carefully chosen AIM-listed companies in a concentrated portfolio of around 40 holdings. It was launched in September 2018, but we have known manager Richard Penny for a long time and believe him to be a very talented stock-picker. This fund has started very strongly.”

One fund loses its Elite Rating:

Artemis Monthly Distribution

Artemis has announced that James Foster, one of the co-managers on this fund, will retire at the end of 2021. James has been an exceptional fixed income manager over his career and managed the fixed income portion of this fund well. Whilst there remains some consistency with co-manager Jacob de Tusch-Lec staying on to manage the equities portion, the mandate for the larger fixed income segment of the fund will move to a manager whose background is in high yield bonds. We have therefore removed the fund’s Elite Rating and will wait for the new manager’s track record to build up on this slightly different product before reconsidering.

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.