New Ratings
Fidelity Index World – Silver
Dimitar Boyadzhiev
We have a positive view of the strategy as defined by the MSCI World, as it has proved difficult to beat by active managers over time. This, coupled with a rock-bottom fee of 0.15%, leaves the fund well-positioned to continue producing superior risk-adjusted returns relative to its active and passive peers in the category over the long haul.
PIMCO GIS US Investment Grade Corporate Bond – Bronze
Mara Dobrescu
The fund's advantages include the tenacity of its veteran lead manager, the support of a large group of corporate managers and analysts, and a versatile process that draws on the firm's robust macroeconomic and fundamental research. On the other hand, the fund’s high fees are a structural hurdle limiting the magnitude of its potential outperformance, which reduces its appeal to some extent.
Upgrades
L&G Fixed Interest – Bronze
Irene Ruiz Espejo
Mark Benstead has managed this fund since September 2014. He is an experienced investor and, despite being at the helm of this sterling-corporate-bond fund for only three years, he has demonstrated the ability to effectively execute its conservative approach. We are thus upgrading the fund’s Morningstar Analyst Rating to Bronze from Neutral. Benstead tweaked the strategy somewhat when he took over, raising the outperformance target from 75 basis points to 100 basis points. He also increased the focus on credit selection as the key alpha driver while keeping duration bets limited. Overall, we view the changes brought about by Benstead as positive. The fund’s cheap fees are an additional bonus.
PIMCO GIS Global Investment Grade Credit – Silver
Mara Dobrescu
We have upgraded PIMCO GIS Global Investment Grade Credit’s Morningstar Analyst Rating to Silver from Bronze. Its advantages include the tenacity of its veteran lead manager, the support of a large group of corporate managers and analysts, and a versatile process that draws on the firm's robust macroeconomic and fundamental research. While the fees charged here are above the industry norm, investors who can access the fund’s rebate-free share class get a somewhat better deal. We believe this multifaceted approach will continue to serve investors well.
Robeco Global Credits – Silver
Niels Faassen
This fund has been managed by Victor Verberk since inception (July 2014). The investment process is a combination of top-down beta positioning (that is, management of the portfolio’s market sensitivity) and bottom-up security selection, with an emphasis on the latter. It allows the managers considerable freedom to invest based on their level of conviction. We value the process’ leeway and believe that Verberk has applied it effectively. Although the fund’s public track record is still relatively short, we find comfort in the team’s solid performance on its global credit mandate, which dates to 2010. The fund’s reasonable fees also provide it a tailwind versus peers, consolidating its appeal as one of our favourite offerings within the category.
