Four funds gain an Elite Rating

FundCalibre has awarded an Elite Rating to four more funds: Artemis Monthly Distribution, Jupiter Absolute Return, Lazard US Equity Concentrated and Schroder High Yield Opportunities. The new additions bring the total number of funds with the rating to 158.

Juliet Schooling Latter, director of FundCalibre, commented: “We’ve added a couple of funds that offer a monthly income, which should appeal to investors seeking a regular income stream. The first is Artemis Monthly Distribution, which invests in both bonds and equities from around the world in pursuit of an attractive monthly income, as well as capital growth. The fund’s natural split is 60% bonds and 40% equity, although it can shift quite significantly, depending on how the managers feel about global economies, stock markets and companies. While many multi-asset funds combine bonds and equities, we particularly like this fund’s highly active approach to managing allocation, which means the fund can respond effectively to changing market environments. The current yield is 3.72%.

“The second fund is Schroder High Yield Opportunities (previously Monthly High Income), which invests primarily in pan-European high yield bonds and has a current yield of 6.32%. The team combine broad macroeconomic themes—ones they believe will play a major role in global credit markets —and fundamental research—where analysts rank specific issuers they believe will thrive on those themes—to find investments they believe offer the best risk/reward profile. Themes are categorised by the time horizon in which they are expected to develop.

“We’ve also awarded a rating to Jupiter Absolute Return. It is rare to find a fund with such low historic correlation to other asset classes, even in the absolute return space. We think this characteristic could make the fund an effective diversifier and a good complementary portfolio holding. Manager James Clunie is something of a short-selling specialist and he has managed the fund since September 2013, the same year he joined Jupiter from Scottish Widows, where he ran a similar strategy for four years. He uses three screens to analyse stocks over three different time horizons to determine their ‘fair value’ and whether they are currently trading above or below that value. Based on the result, he may then either invest in a stock (if it looks fair or undervalued) or short it (if it looks overvalued).

“The fourth fund to gain a rating is Lazard US Equity Concentrated. As the name suggests it only invests in a few companies at a time (no more than 20-25), ranging in size from the fairly small all the way through to the very large. It contains the best ideas from across Lazard’s US equity funds. Launched in 2003, the fund only became available to UK investors in 2016. Stocks in the fund fall into one of three buckets. ‘Compounders’ make up the largest bucket and are businesses that don’t need a lot of capital to run and can keep re-investing their profits for ongoing growth. ‘Mispriced’ are stocks that are cheap, but where there may be potential for earnings to rise, and ‘tactical’ refers to purchases that are shorter-term trades, where the managers want exposure to a certain business or sector for a particular period.”

The views of the author and any people interviewed are their own and do not constitute financial advice. 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. Before you make any investment decision make sure you’re comfortable and fully understand the risks. If you invest in fund or trust make sure you know what specific risks they’re exposed to. Past performance is not a reliable guide to future returns. Remember all investments can fall in value as well as rise, so you could make a loss.