Summer 2022: the funds gaining and losing their Elite Ratings

Following FundCalibre’s summer investment committee, three new funds have gained an Elite Rating from FundCalibre, as have four previously ‘Radar’ funds that now have a three-year track record. Two further funds have been awarded an Elite Radar badge, but nine funds have lost their ratings.

Three newly Elite Rated funds:

CT Global Focus

CT Global Focus is a concentrated, high conviction portfolio of best ideas. Its manager, David Dudding, has always had a very clear philosophy and process which he has executed very successfully throughout his career. He invests in high quality, high return on capital businesses which can compound over the long term. This is a genuine global fund which will also venture into emerging markets.

Cohen & Steers European Real Estate Securities

Cohen & Steers is the industry leader in real estate securities. This fund has a tried and tested process allowing the well-resourced team to sift through the market and try to deliver consistent, above market returns led mostly by stock selection, as well as some sector and regional allocations. The result is a risk aware portfolio which can offer investors exposure to this diversifying asset class, knowing it is backed with a repeatable, sound process.

Cohen & Steers Diversified Real Assets

While this fund is a relative newcomer to the UK market, it has the backing of Cohen & Steers’ depth and breadth of expertise. It offers investors a single destination for a range of inflation protecting assets, built with an eye on diversification, as well as returns. It should also offer investors a return profile very different to other funds out there. We believe this makes it a compelling choice, especially in tough inflationary environments.

One new Elite Radar:

M&G Japan

This multi-cap Japanese equity fund has been run by Carl Vine since September 2019. Carl is passionate and extremely knowledgeable about the Japanese market, and really understands the businesses in which he invests. This is combined with a strong understanding of the Japanese culture, and a close eye on the risk/reward with each investment. The fund has a slight value bias and has outperformed so far under Carl’s tenure.

Four funds with three-year track records move to Elite Rated:

T. Rowe Price US Smaller Companies Equity

The manager of this fund looks for both growth and value opportunities in the small and mid-cap space, to build a diverse portfolio of the best ideas from the vast analyst resource at his disposal. He will allow his winners to run as long as he still believes there is a return opportunity. As such, the portfolio is likely to have more of a mid-cap bias than its peers and it will also invest in areas such as biotech, which other generalist funds often avoid.

FSSA Global Emerging Markets Focus

This fund invests in 40-45 large and medium-sized companies in emerging markets. Manager Rasmus Nemmoe has an absolute return mindset and looks for quality companies that can demonstrate sustained and predictable growth over the long-term. The fund has a strong environmental, social and governance ethos without labelling itself as such. While relatively young, it has already shown a lot of potential.

Man GLG High Yield Opportunities

This is an unconstrained global high yield bond fund. Manager Mike Scott is ably supported by a team of internal credit analysts who conduct a rigorous analysis of every potential holding and their ability to meet debt obligations. Mike is very experienced and has an excellent track record in navigating the extra risk in the sector whilst achieving above average returns.

TM Tellworth UK Smaller Companies

Launched in 2018, this is a pure smaller companies fund run by two very experienced and highly regarded managers, Paul Marriage and John Warren. Paul and John have an outstanding long-term track record and this fund is very similar to portfolios they have run before. They focus on smaller companies, avoiding micro-caps and mid cap stocks and meeting company management is integral to the investment process.

One fund moves to an Elite Radar:

T. Rowe Price Asian Opportunities Equity

T. Rowe Price Asian Opportunities Equity fund was previously managed by Eric Moffett but has now been taken over by Jihong Min. Jihong has a very similar philosophy of buying high quality companies run by high quality people and holding them for the long term. He has the backing of a strong analyst team on the ground, which is very beneficial. We are confident that Jihong can deliver good performance in the future and the fund is one we are watching closely.

Nine funds lose their ratings:

Lesley Duncan, who has managed the abrdn UK Ethical Equity fund for almost two decades, leaves the company this month. As the track-record leaves with her, the fund loses its Elite Rating.

JOHCM UK Equity Income, Jupiter UK Smaller Companies, Ninety One Global Special Situations, Ninety One UK Alpha, and Sanlam Enterprise all lost their ratings due to deteriorating AlphaQuest scores.

Although AXA Sterling Credit Short Duration Bond continued to pass AlphaQuest, it failed to beat cash returns over a five-year period. The investment committee therefore felt the quant was not reflective of the fund’s actual performance and therefore it should lose its rating on a qualitative judgement.

Janus Henderson UK Property PAIF and Aviva High Yield Bond funds were closed during the review period and assets were returned to shareholders.

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.