Funds gaining and losing their ratings this spring

Following its interim investment committee meeting, FundCalibre has awarded six funds an Elite Radar and nine funds a full Elite Rating.

The fund research at FundCalibre has a formal investment committee meeting twice a year. During the meeting the team debates funds they have identified for potential ratings and identify any existing funds that should lose their rating based on either a deteriorating AlphaQuest score or other fundamental changes.

15 new funds gain ratings

Elite Radar funds

Six funds have been awarded the Elite Radar rating: four new launches, one with a new manager and one with a recent change of process.

GAM UK Equity Income: Launched in October 2017, the manager of this fund can invest in the shares of any UK firm – and also in a company’s bond if he feels the opportunity is better. The current yield is 3.95%*.

LF Tellworth UK Smaller Companies: Launched in November last year, this fund is run by two managers who have worked side-by-side for many years: ex-Cazenove and Schroders duo Paul Marriage and John Warren.

Polar Capital Healthcare Investment Trust: Reconstructed in 2017, this finite life investment trust invests in healthcare stocks from all over the world – predominantly those found in the pharmaceutical, biotechnology, medical technology and healthcare services sectors.

Rathbone Global Sustainability: This high conviction global equity fund was launched in July last year and will avoid companies involved in unethical or unsustainable practices. Each holding must also have at least one positive environmental, social or governance attribute.

Smith & Williamson Artificial Intelligence: Now 18 months old, this fund not only invests in companies whose business models are aligned to benefit from artificial intelligence, it also uses AI as part of its investment process.

Trojan Global Income: This fund’s manager took over two and a half years ago, having previously managed sector ‘heavy-weight’ Newton Global Income. He looks for cash-generative companies that are allocating resources sensibly and distributing excess cash to shareholders.

Elite Ratings

Nine funds have been awarded the full Elite Rating – five global, three regional equity products and one absolute return.

Artemis US Extended Alpha: The manager of this fund invests in 60-95 companies from the S&P500, the index of the 500 largest companies in the USA. He can also ‘short’ some stocks if he thinks the share price will fall.

Baillie Gifford Japanese Smaller Companies: This fund invests in the higher-risk area of Japanese small-caps, with the manager looking for innovative firms that have the potential to be future industry leaders.

Invesco Global Equity Income: Run by Invesco’s Chief Investment Officer, this fund captures the best regional ideas of the equity income teams, with a focus on rising income rather than higher-yielding companies.

JOHCM Global Opportunities: This fund can invest anywhere around the globe but has a bias towards larger and medium-sized multi-national businesses. Because the manager is more cautious than many of his peers, the fund has traditionally been amongst the least volatile in its sector.

Lazard Global Equity Franchise: Differentiated by the managers’ systematic approach to portfolio construction, which removes behavioural biases, this fund invests in industry leaders with a natural bias towards larger-sized firms.

Merian Global Equity Income: This fund is built off the same systematic, quantitative process as the successful Merian Global Equity Absolute Return fund, which also has an Elite Rating.

TwentyFour Absolute Return Credit: Looking to achieve a positive return in any market environment, this fund invests in low-risk opportunities in the bond universe. It has a simple process and does not short any stocks.

Waverton European Capital Growth: This fund has a clear and common-sense strategy, investing in large and medium-sized European businesses. Many of their best ideas come from companies, which are in the early stages of reform and, often, a new management team will be a part of this.

Funds losing their Elite Ratings

The following seven funds have lost their Elite Ratings due to a deteriorating AlphaQuest score:

Aberdeen Emerging Markets Bond, Artemis UK Special Situations, Artemis Strategic Assets, JOHCM Asia ex Japan, Neptune UK Mid Cap, Schroder MM Diversity and Schroder MM Diversity Tactical.

In addition, the following two funds have lost their Elite Rating due to the fund manager retiring:

Fidelity Strategic Bond and Mirabaud Equities Europe Ex-UK Small and Mid.

Other fund changes

AXA Framlington UK Select Opportunities has had the full Elite Rating removed, but has been awarded an Elite Radar. Veteran manager Nigel Thomas retired in March 2019. However, succession planning has been very thorough and deputy manager Chris St. John has taken over the reigns. We have met Chris on a number of occasions and his way of thinking is very similar to that of Nigel. The investment process will remain the same and, as Chris has been deputy for more than five years, we see no reason why he would not be able to replicate the past success of this fund. As we await his three-year track record to come through, we are happy to place the fund on the Elite Radar.

And finally, those of you interested in, or investing in, the Ashburton India Equity Opportunities fund may have noticed that it has had a change of name and is now IIFL India Equity Opportunities.

The fund is managed by a team of three people: Jonathan Schiessl, Simon Finch and Craig Farley. The three managers all worked together at Ashburton Investments, before moving to IIFL Asset Management in 2018. The fund and its assets moved with them, ensuring continuity of process for investors.


*Fund factsheet 31 January 2019

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.