Square Mile Academy of Funds: Ratings Round-Up for April 2023

by | May 3, 2023

  • New rating for R&M UK Listed Smaller Companies fund 
  • Nine ratings retained

Analysts at Square Mile Investment Consulting and Research (Square Mile) conducted 85 interviews with investment professionals from 41 asset management groups over the course of April 2023. Based on the intelligence gained during these meetings, and following reviews in the light of corporate announcements, the following actions have been taken.

New ratings 

ES R&M UK Listed Smaller Companies fund awarded Positive Prospect rating 

Square Mile’s team of analysts have introduced the ES R&M UK Listed Smaller Companies fund into the Square Mile Academy of Funds (the Academy) with a Positive Prospect rating. This fund favours high quality growth companies while applying a strict valuation discipline to construct a portfolio with the potential of outperformance through the cycle, with some downside protection.  Its manager, George Ensor, has a limited track record on this strategy but the Square Mile team considers him to be a sensible and pragmatic investor, ably supported by alternate portfolio manager, Mayan Uthayakumar and analyst, Anna Pugh.

Overall, the analysts believe this to be a compelling proposition, run by a young but promising manager and would suit investors looking for exposure to a reliable UK smaller companies fund. (Decision as at 26.04.23)

 Ratings retained 

TB Amati UK Listed Smaller Companies fund retains its A rating 

Despite the recent news that Anna Macdonald has left Amati Global Investors (AGI), Square Mile has retained its A rating on the TB Amati UK Listed Smaller Companies fund.  The analysts acknowledge that Ms Macdonald was a key member of AGI’s UK smaller companies team, however, the fund continues to be managed in a highly collegiate manner by three very experienced co-managers. This includes the architect of the investment approach, Dr Paul Jourdan, with further support from analyst Dr Gareth Blades. (Decision as at 25.04.23)

PIMCO Climate Bond fund retains is Positive Prospect rating  

Square Mile’s analysts reviewed its Positive Prospect rating on the PIMCO Climate Bond on the news that Ketish Pothalingam, one of its portfolio managers, is to retire at the end of July. The fund continues to be managed by Jelle Brons, Grover Burthey and Samuel Mary, and from the start of June, Regina Borromeo, who has joined the team to replace Mr Pothalingam.

The analysts’ conviction in this fund remains centred on the extensive firm-wide resources and the reliable investment approach developed by PIMCO, which combines investment into green bonds and those issued by companies that are leaders in mitigating carbon emissions in their respective industries. (Decision as at 20.04.23)

L&G Multi Index fund range retains its Recommended rating 

Despite the news that Justin Onuekwusi is to leave LGIM, Square Mile has retained its Recommended rating on the L&G Multi-Index fund range. Although Mr Onuekwusi was lead manager, he was well supported by co-managers Andrzej Pioch and Francis Chua, who maintain their involvement in the funds, and the well-resourced Asset Allocation team. Mr Pioch, who has been a named fund manager since 2015, will now become the lead manager.  The analysts maintain their conviction in the range centres on the strong team-based investment approach and the continuity that Mr Pioch and Mr Chua bring. (Decision as at 13.04.23)

Rathbones retains all ratings 

Square Mile reviewed its Responsible A rating on the Rathbone Ethical Bond fund on the news that co-manager Noelle Cazalis is leaving the business to pursue other interests. The analysts’ conviction in this strategy stems from the expertise of lead manager and Head of Fixed Income, Bryn Jones, who has run the fund since he joined the firm in 2004. He is supported by fund manager Stuart Chilvers, the credit analyst team and the wider firm resources, which include the dedicated ethical research team.

Additionally, in light of the announcement of the proposed merger of Rathbones and Investec’s UK Wealth & Investment businesses, Square Mile confirms it has retained the ratings across the following funds:

  • Rathbone Defensive Growth Portfolio – Recommended 
  • Rathbone Dynamic Growth Portfolio – Recommended 
  • Rathbone Enhanced Growth Portfolio – Recommended 
  • Rathbone Strategic Growth Portfolio – Recommended 
  • Rathbone Total Return Portfolio – Recommended 
  • Rathbone Ethical Bond fund – Responsible A 

Square Mile’s analysts acknowledge that the combination of the two entities will be material at the corporate level, although they expect minimal impact on Rathbone Unit Trust Management, the group’s asset management business. As such, they do not anticipate any change to the underlying philosophy and process of the investment teams within this unit and are therefore comfortable to keep all ratings in place.  They will, however, closely monitor the situation in the run up to the deal completing which is expected to be in the second half of the year. (Decision as at 04.04.23)


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