Analysts at Square Mile Investment Consulting and Research (Square Mile) conducted 58 interviews with investment professionals from 37 asset management groups over the course of June 2022.
Based on the intelligence gained at these meetings, and following reviews in the light of corporate announcements and developments, the following actions have been taken.
New ratings
Guinness Global Equity Income fund awarded AA Rating
Square Mile’s team of analysts has introduced the Guinness Global Equity Income fund to the Academy of Funds with an AA rating. This concentrated mandate is co-managed by Ian Mortimer and Matthew Page whom the analysts believe to be impressive fund managers with a robust performance track record. The fund follows the simple philosophy that those companies with a history of generating high returns on capital are both likely to perform relatively well and exhibit consistent dividend growth.
The process is highly geared towards owning quality companies that maintain high returns on equity, good profit margins, low leverage, and strong balance sheets. The fund has therefore proved to be resilient in market drawdowns. It targets a more moderate dividend yield than others in its sector although it aims to grow its dividend stream year-on-year, which it has achieved since inception, with the exception of 2020.
Square Mile believes this fund to be suitable for investors seeking a growing dividend stream from a global mandate, but with a total return mindset and a lower volatility profile than the broader market. (Decision as at 21.06.22)
Rathbone Multi-Asset Portfolio Range awarded a Recommended rating
Square Mile has awarded the Rathbone Multi-Asset Portfolio range of funds a Recommended rating with the Defensive Growth, Strategic Growth, Dynamic Growth and Enhanced Growth portfolios joining the Total Return portfolio in the Academy of Funds. The A rating held by the Total Return portfolio will be converted to a Recommended rating to align it with the other funds in the range.
The analysts believe this fund range to be a compelling option for investors seeking to grow their capital over the longer term in a risk-controlled fashion. A key attraction of the range is the experience of co-manager David Coombs who has proved his ability as an astute asset allocator and portfolio constructor over several years.
In addition, his long-standing investment process has helped him successfully tilt the portfolios to the prevailing market conditions, making a meaningful contribution to the performance of the range since launch. (Decision as at 17.06.22)
Rating retained
SVM UK Opportunities fund retains its A rating
Following the announcement in June 2022 that AssetCo PLC has conditionally agreed to acquire SVM Asset Management, Square Mile has decided to maintain the A rating held by the SVM UK Opportunities fund.
Whilst this change in ownership is likely to be material at the corporate level, Square Mile’s analysts do not foresee any change to the underlying philosophy and process applied by the fund’s manager, Neil Veitch. However, they will closely monitor SVM Asset Management’s transition into its new parent company as the deal completes towards the end of the year. (Decision as at 22.06.22)
Rating removed
ES R&M Global Recovery fund loses its A rating
Square Mile has removed the A rating from the ES R&M Global Recovery fund. While the analysts acknowledge manager Hugh Sergeant’s lengthy investment experience and impressive long-term track record running UK equity strategies, they do not feel this success has been repeated within a global equities mandate. Over time, the fund has struggled to meet the analysts’ expected outcome and following a lengthy review, they have taken the decision to remove the fund from Academy.
