Winter 2023: the funds gaining and losing their Elite Ratings

Following its Winter investment committee, FundCalibre has awarded five Elite Ratings and two new Elite Radar badges. A further four funds lost their ratings in the review.

Five newly Elite Rated funds:

Man GLG Sterling Corporate Bond

This fund has a flexible approach, investing globally across different geographies and sectors. The focus is on investing in bonds issued by companies, but only those that have a margin of safety. This is achieved through rigorous research of a firm’s financials. Manager Jonathan Golan is one of the most exciting young bond fund managers around today. He often finds many of his best ideas off the beaten path and is not afraid to invest in small and medium-sized issuers.

AXA Framlington Biotech

One of the few winners from the impact of the Covid pandemic, the case for investing in biotechnology is a strong one. These companies are helping us live longer by bringing new drugs to market to tackle the likes of cancer, heart disease and obesity. The sector is evolving at a rate of knots and requires a specialist, focused team with skills, experience, and a network to keep up with these changes. That is exactly what manager Linden Thomson and her team offer with this fund.

LF Lightman European

This is now one of only a few funds left with a genuine ‘value’ style. Performance has been excellent since its launch four years ago, but it is the sort of fund which is likely to either be at the top or the bottom of the performance charts in any one year, depending on whether or not its style is in or out of favour. For investors who can stomach the potential volatility, this could be a great option, especially if they are looking to balance out their style exposure elsewhere within their portfolio.

Pictet Japanese Equity Selection

This is a high-conviction strategy which invests in large and medium-sized businesses for the long term. The manager uses a combination of market and company analysis to select Japanese firms that promote good environmental and governance practices and offer favourable growth prospects at a reasonable price. He uses a four-step process that implements both quantitative and qualitative methodologies to aid his research.

JPM Global Equity Income

This is a core global equity income fund that will invest all around the world, including in emerging markets. The managers aim to achieve a superior yield on the fund, without sacrificing growth. With the aid of a huge global team of analysts, they filter down the whole global market to a portfolio of 40-90 predominantly large and mega-cap companies, balancing ‘compounders’ with higher yielders and higher growth stocks.

Two new Radar badges:

TB Amati Strategic Metals

This fund is a great portfolio diversifier that taps into unique investment opportunities, including the transition to a lower carbon world. The strategy places great emphasis on the stage in which metals are in their cycle and the managers will only invest in internationally listed metals and mining companies whose revenues are sourced from the sale of metals that have strategic importance to the global economy. These include gold, silver, copper, nickel, manganese, lithium, and platinum.

Artemis Global High Yield Bond

We like the unique approach behind this fund, with the managers taking advantage of the inefficiencies created by many of their peers focusing heavily on the larger players in the index. By contrast, their approach of focusing on the smaller and medium players has allowed them to consistently find hidden gems with a strong upside, helping them to outperform. They are also supported by one of the strongest teams in the asset class.

Four funds lost their ratings:

TM CRUX European Special Situations – unfortunately, the AlphaQuest score of this fund has continued to deteriorate over a period of time, along with performance. The fund therefore loses its Elite Rating.

Schroder Global Recovery – a fund can only remain on the Elite Radar for 6 years, before it must either move to an Elite Rating or lose its Radar badge. This fund now has a 7-year track record but does not score highly enough on AlphaQuest to move to a Rating, even when stylistic challenges are considered. Therefore, the fund must lose its Elite Radar.

SVS Church House Tenax Absolute Return Strategies – a deteriorating AlphaQuest score, alongside performance issues where the fund hasn’t delivered an absolute return over its stated timeframe, means the fund has lost its Elite Rating.

CT UK Equity Income – with the manager retiring, the decision has been made to remove the Elite Rating from the fund pending a meeting with the new manager. A decision will be made after that meeting as to whether it has the potential for an Elite Radar.

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