New Ratings
BGF US Dollar High Yield – Bronze
Mara Dobrescu
We have initiated coverage of BGF US Dollar High Yield with a Morningstar Analyst Rating of Bronze. This fund’s managers have demonstrated their ability to maintain the fund’s edge over time, making the most of an expansive tool kit to navigate various market environments.
Instead of targeting a sweet spot on the credit-quality spectrum, the managers aim to make the most of their flexible approach, turning cautious when riskier bonds offer paltry compensation and bold when risk-taking pays. The fund’s fees have come down slightly over the past year, which is a move in the right direction, though they are not yet cheap enough to give this fund a significant tailwind over the competition. Overall, the fund earns a Morningstar Analyst Rating of Bronze.
AQR Global Risk Parity fund – Neutral
Matias Möttölä
We have initiated coverage on the AQR Global Risk Parity fund with a Morningstar Analyst Rating of Neutral. The fund is run by a capable team but the strategy lacks a clear and sustainable edge versus similar options. Risk-parity funds attempt to allocate money so that each asset class within a given portfolio contributes equally to a fund’s risk profile.
This fund’s risk weights are equally fixed between global equities, developed-market nominal government bonds, and inflation-protection – commodities and inflation-linked bonds – without any tactical considerations.
The fund’s differentiated return path may make it an attractive option for diversifying a traditional portfolio, and it's helped by relative low fees. Still, investors must be prepared for potentially extended periods of underperformance compared with traditional allocations.
