After months of behind-the-scenes research, Morningstar OBSR analysts have just formally announced they’re initiating coverage on three news funds, which have all received Bronze ratings.
These Bronze ratings indicate that the analysts strongly believe that these funds will outperform their peer groups and benchmarks over the long term, on a risk-adjusted basis. This means the funds are expected to perform well and have less worry-inducing volatility compared to other funds.
Here are some comments from Morningstar OBSR analysts about the three funds that have just received Bronze ratings:
FundSmith Equity
Rating: Bronze
This fund is managed by Terry Smith, a well-known figure in the finance industry. He seeks to invest in high quality businesses whose assets are intangible and difficult to replicate, thereby compounding in value over the years. The fund will, for example, not invest in any companies that require leverage, are cyclical or fashionable or have a high degree of obsolescence. The fund has a large-cap bias, is concentrated in nature and is distinctly long term in its approach. In performance terms the fund seeks to deliver strong compound returns over the long term with no formal benchmark, although for comparison purposes the MSCI World Index is the most useful comparator. In practice the fund's bias to higher quality names which are typically defensive in nature will likely lead to strong performance in weaker markets and may lag in periods when markets are rising rapidly. Overall, we believe that Terry Smith's long-term, distinctive approach and strong focus on delivering consistent, positive risk-adjusted returns make this a strong choice for investors.
(This fund is also considered to be Buffett-esque in its investment approach. To learn about other funds that use a Warren Buffett-style approach to investing, read Invest Like Buffett.)
Premium subscribers can read the full fund research report here.
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Neptune Russia & Greater Russia
Rating: Bronze
This fund is managed by Robin Geffen, an experienced investor who we hold in high regard. The manager has significant experience of investing in Russia and this fund offers investors access to a portfolio of large and liquid mid-cap names.
Premium subscribers can read the full fund research report here.
Standard Life Investments European Equity Income
Rating: Bronze
Our Bronze rating is based on our confidence in the fund’s manager and his robust process. The fund is managed by Will James, who has been involved in developing this fund since its inception. Based in Edinburgh, he seeks companies that he believes have the ability to deliver high and sustainable dividend yields, companies with strong dividend growth and those with dividend upgrade potential.
Premium subscribers can read the full fund research report here.
