boltons fund struggles to neutral rating

Anthony Bolton’s Fidelity China Special Situations Fund has been given a ‘neutral’ rating by Morningstar at the launch of its new investment trust analyst ratings service.

boltons fund struggles to neutral rating


The qualitative rating scale for investment trusts follows the same model as Morningstar’s recently revamped Oeic rating scale, ranging from gold, silver and bronze through to neutral and negative.

This means Bolton’s £579m fund, which is down 36% in the year to 9 January, compared to a fall of 17% from its benchmark, is only one rank above negative.

The fund was one of 32 investment trusts that have cooperated with Morningstar over the past year in order to be included in the rating service.

Before now Morningstar has only rated ETFs and Oeics and has cited the lack of data and transparency in the investment trust world as an obstruction to the process.

Now, with the approach of RDR, Morningstar said investment trusts would have the opportunity of a level playing field with their open-ended cousins, with advisers obliged to consider all types of investment vehicles.

For this reason, the time is now ripe for Morningstar to launch a closed-end ratings service, which it hopes will have more than 100 funds on it by the end of the year.

The rating service for investment trusts will use the five-pillar framework of its existing models, looking at people, process, parent, performance and price.

Consideration will also be given to gearing and discounts, which are unique to investment trusts, as well as the role the board plays in holding managers to account.

Morningstar said it would be talking to advisers during a series of investment trust education events around the UK and urged advisers to let them know if there was a particular fund they wanted rating.

Jackie Beard, director of closed end fund research, said; "If we are not covering the right funds for them they are not going to use it and if there is reluctance on the part of the fund house to be included we will say ‘this is an opportunity’."