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Square Mile Academy of Funds: Ratings round-up for October 2021

  • One new Responsible rating awarded
  • One rating upgraded
  • One rating reinstated
  • River and Mercantile retains its funds’ ratings
  • One rating removed

 

Analysts at Square Mile Investment Consulting and Research (Square Mile) conducted 61 interviews with investment professionals from 23 asset management groups over the course of October 2021. Based on the intelligence gained at these meetings, the following actions have been taken.

New rating 

Schroder Global Cities Real Estate fund receives Responsible A rating 

Square Mile’s analysts have introduced the Schroder Global Cities Real Estate fund into its Academy of Funds with a Responsible A rating. In their view, the managers have identified an attractive opportunity within the global real estate market and built an impressive investment process to exploit this on behalf of investors. Environmental, social and governance (ESG) considerations are deeply embedded throughout the investment process, with the managers seeking to invest in sustainable real assets that enable society to meet its present needs without compromising the ability of future generations to meet theirs. (Decision as at 05.10.21)

Rating upgraded 

ASI Global Smaller Companies fund upgraded from Positive Prospect to A Rating 

Square Mile has upgraded the rating of the ASI Global Smaller Companies fund from Positive Prospect to A. The team of analysts have been monitoring the progress and development of Kirsty Desson following the departure of the fund’s previous manager. They believe Ms Desson has demonstrated a good understanding of the investment process and provided good overall continuity in the fund’s management. The analysts consider her to be a capable investor and feel the A rating reflects their higher level of conviction in the fund’s ability to meet its stated objective.  (Decision as at 22.10.21)

Rating reintroduced 

Invesco Tactical Bond fund regains A rating 

Square Mile’s analysts have reinstated the Invesco Tactical Bond fund to the Academy of Funds with an A rating. They believe the fund’s managers, Stuart Edwards and Julien Eberhardt, are a good combination to lead the fund in future and they clearly understand its underlying philosophy and process, as long standing members of the team. The fund also continues to be well supported by the impressive wider fixed income resources and infrastructure at Invesco, which the retiring team co-heads, Paul Read and Paul Causer, have built up over more than 25 years. (Decision as at 07.10.21)

Ratings retained 

River & Mercantile funds retain ratings 

On the news that River & Mercantile Group (RMG) has accepted an offer from Schroders to acquire its Solutions Division, Square Mile has confirmed that it has retained the ratings on the following funds:

ES R&M Global Recovery – A,

ES R&M UK Recovery – AA,

ES R&M UK Equity High Alpha – AA,

ES R&M UK Equity Income – AA,

ES River and Mercantile European – Positive Prospect

The acquisition is subject to shareholder approval and is expected to complete in Q1 2022. Whilst this is a material development at a corporate level, the asset management element of the business remains unchanged and therefore Square Mile does not believe the management of these funds will be affected. (Decision as at 26.10.21)

Rating removed 

Artemis European Opportunities fund loses A rating 

Square Mile’s analysts have kept the Artemis European Opportunities fund under review since the departure of former co-manager Mark Page, in October 2020. Although Laurent Millet, the fund’s now sole manager, has refined parts of the investment process, their conviction in the strategy has waned and as it operates in a highly competitive sector, they feel they can no longer support its A rating. (Decision as at 27.10.21)

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