Upgrades
Arcadian Global Managed Volatility Equity - Silver from Bronze
Natalia Wolfstetter
Our conviction in the team and process has not changed, with both People and Process receiving Above Average ratings. However, under our enhanced ratings framework, which places a greater focus on fees and expected benchmark-relative performance, the Morningstar Analyst Rating for all share classes of Arcadian Global Managed Volatility increases to Silver from Bronze.
Edinburgh Investment Trust - Bronze from Neutral
Bhavik Parekh
In December 2019, Invesco lost the mandate to manage Edinburgh Investment Trust, at which point the trust’s Morningstar Analyst Rating was placed under review. Effective 1st January 2020, the board appointed Majedie Asset Management, with Majedie co-founder James de Uphaugh as lead manager. The approach used by James de Uphaugh, which has seen him build a strong track record versus the index on his sleeve of Majedie UK Equity since 2003, appears well suited to the dividend growth mandate of this trust. We see merit in de Uphaugh’s experience and believe he represents a safe pair of hands. The trust earns a Morningstar Analyst Rating of Bronze.
Downgrades
Allianz China Equity - Neutral from Bronze
Claire Lang
While we continue to value portfolio manager Christina Chung’s experience and passion for investing, the supporting team has experienced a high level of turnover since 2017, and we are concerned this level of turnover would affect the quality of research. The team’s slow progress in growing its research capability is also likely to limit Chung’s ability to take advantage of the expanding opportunity set. The investment approach has gradually shifted to become more diversified and lenient on valuation, and a few implementation issues relating to sell discipline further lowered our conviction on this strategy. The Morningstar Analyst Rating for the RT share class is therefore downgraded to Neutral from Bronze. All other share classes are also now rated Neutral.
Fidelity India Focus - Neutral from Bronze
Samuel Lo
Amit Goel, who has been the named manager of Fidelity India Focus since 31 March 2016, will step up to assume sole management responsibility of the strategy starting from 28 February 2020, as Sandeep Kothari, the current portfolio advisor, will leave the firm on 31 March 2020. Goel has had a successful, albeit relatively short, time in managing the Asian sleeve of the Fidelity Emerging Markets strategy, and he is familiar with the supporting analyst team. We feel positive about Goel’s abilities and potential and have therefore reinstated a People rating of Above Average. He will continue to follow a quality-growthfocused approach but will also bring changes to the investment process, notably increasing the portfolio concentration and the level of active share relative to the benchmark. While we consider the adjustments sensible, this is Goel’s first stint managing a strategy on his own, and we need more time to observe how he executes his investment process. We have therefore lowered the Process rating to Average from Above Average. Along with our enhanced ratings framework, which places a greater focus on fees and benchmark-relative performance, the cheaper share classes, including the Y-Acc-USD clean share class, carry a Morningstar Rating of Bronze, while the more expensive share classes land at Neutral. The strategy was previously placed Under Review.
Robeco Euro Credit Bonds - Bronze from Silver
Jeroen Siecker
Robeco Euro Credit has an experienced and stable team, solid process, and a strong parent company, giving it strong appeal. Our conviction in the team and process has not changed; it earns Above Average pillar ratings for both People and Process. However, under our enhanced ratings framework, which places a greater focus on fees and expected benchmark-relative performance, the Morningstar Analyst Ratings for its cheapest share classes, including the clean FH share class, decrease to Bronze from Silver, while more expensive classes land at Neutral.
Note: Under the enhanced Morningstar Analyst Rating different share classes of funds may have different ratings
