UK Investment Guides Loader

Square Mile updates fund ratings

written by Bella Palmer

Schroders, Legg Mason and BNY Mellon were highlighted in the firm's Academy of Funds ratings round up

Schroders and Legg Mason have received new fund ratings issued by Square Mile Investment Consulting and Research in its latest update, which also brought good news for BNY Mellon.

The three large fund houses were highlighted within the research firm's Academy of Funds ratings round up for November, published Monday.

Schroders saw its Asian Alpha Plus fund downgraded from AA to A due to a personnel change at the top of the manager list. 

Square Mile said it had made the decision due to the fund's long-standing manager, Matthew Dobbs, passing responsibility to Richard Sennitt at the end of March 2021, before he retires at the end of the year.

Square Mile's analysts emphasise the high regard they have for Mr Sennitt, which is reflected in the AA rating on the Schroder Asian Income fund which he manages, a note to accompany the change announcement said.

However, they feel at this stage, an A rating for the Schroder Asian Alpha Plus fund is more appropriate, given this change in portfolio manager and their conviction in him as he starts to build his own track record on this strategy, it said.

Elsewhere, Square Mile analysts decided to reinstate the BNY Mellon Multi-Asset Balanced fund into the Academy of Funds with an 'A' rating, having removed it in February 2018 after the management team changed.

This new team has adopted a different approach to asset allocation, which Square Mile assessed to be "more pragmatic and benchmark-aware and has less of an emphasis on capital preservation, which had been a feature of the previous team".

The analysts therefore believe it "should appeal to investors that have a long-term investment horizon and who are looking for a multi-asset portfolio with a bias to equities".

Finally, thanks to a consistent and successful application of their investment approach, Square Mile has rewarded the team managing the Legg Mason ClearBridge US Equity Sustainability Leaders fund with an upgrade to a Responsible A rating.

The analysts said this approach had also resulted in "a good level of asset growth and a rewarding performance profile for its investors". The Square Mile team also noted that Franklin Templeton's acquisition of Legg Mason was a positive factor for the fund.

Seven funds were admitted to the Academy this month, of which three received responsible ratings.

BNY Mellon saw another fund join its reinstated multi-asset offering, as the BNY Mellon Japan Small Cap Equity Focus fund received an A rating thanks to its "experienced and highly credible" manager Kazuya Kurosawa, while Aegon's European ABS fund was awarded a AA rating for its "highly compelling proposition" offering access to a "less well-known" area of the market.

PIMCO, described by Square Mile as "one of the strongest franchises in the industry", also received an AA rating on its Mortgage Opportunities funds and Aberdeen Standard achieved a 'Recommended' rating for its Aberdeen Standard Liquidity (Lux) - Sterling fund, which despite its "well priced" ongoing charges fee of 10bps may still result in "a small negative monthly return to investors, net of fees" due to the interest rate environment.


The opinions expressed by our writers are their own and do not represent the views of UK Investment Guides. The information provided on UK Investment Guides is intended for informational purposes only. UK Investment Guides is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

Share this post with friends!