The Jupiter Merlin team has seen an additional fund added to the Square Mile Academy of Funds, while the Threadneedle UK and Ashmore Short Duration funds have both been dropped as part of a number of changes that took place just before Christmas.
John Chatfeild-Roberts’ (pictured) team already features in the Academy of Funds via the Jupiter Merlin Growth, Income and Balanced portfolios. But now their Conservative portfolio has also been added to the Academy.
In a press release, Square Mile said its analysts hold the team in high regard and consider this to be a “compelling offering” for investors seeking a defensive product run by experienced investment managers with a “strong heritage” of managing multi-asset, fund-of-funds strategies.
The fund was one of four to be awarded new ratings in December 2021, following a month in which Square Mile met with 51 investment professionals from 29 fund groups.
FSSA Japan Focus, managed by Sophia Li and Martin Lau, and two LGIM index trackers, L&G Future World ESG UK Index & L&G Future World ESG Developed Index, both received responsible ratings.
The FSSA Japan Focus fund has ESG and sustainability integrated through its process, Square Mile said, while the LGIM funds have a positive tilt towards companies with a high ESG score and negative tilt away from those with low scores. All three funds avoid sin stocks.
Threadneedle and Ashmore funds lose Square Mile ratings
The month also saw Square Mile remove ratings on two funds.
The Threadneedle UK fund lost its rating due to a “prolonged period of disappointing returns relative to its benchmark”. The £2bn fund, managed by Chris Kinder, is fourth quartile in the Investment Association UK All Companies sector over one, three and five years.
A “challenging period of performance” was also behind the Ashmore Emerging Markets Short Duration fund losing its rating. The fund is also fourth quartile over one, three and five years in the Offshore Fixed Interest – Emerging Markets sector.
Square Mile reaffirms faith in funds facing corporate and investment team changes
A number of funds that have faced manager changes or belong to fund groups facing corporate change were able to retain their ratings.
The change of chief executive at Twentyfour Asset Management means Ben Hayward will step back from portfolio management responsibilities to head the company, while Mark Holman takes a step back from running the company to focus on his portfolios.
“From a fund perspective, the Twentyfour Strategic Income fund will now benefit from Mark Holman’s focus on investment management,” Square Mile said in the press release. “While the Twentyfour Monument Bond fund will lose much of Ben Hayward’s direct input, it is managed with a team approach across 11 investment managers, three of whom are partners in the firm. Square Mile therefore anticipates any impact on the fund to be manageable.”
The LF Majedie UK Equity fund will retain its rating after its parent company is acquired by Liontrust given there will be no change to the investment approach. Although Square Mile’s analysts will meet with Majedie over the coming weeks to discuss the transition and future structure of the team.
The departure of Harry Nimmo as co-manager on the ASI Global Smaller Companies fund won’t have any effect on its rating.
Additionally, Square Mile has reintroduced its rating for the Invesco Distribution fund following the departure of Paul Causer and Paul Read at the end of 2021. Edward Craven was promoted to co-manager on the fund as part of the change. “Square Mile is reassured that, despite Mr Craven’s relatively limited fund management experience, there will be significant continuity in his approach which draws heavily on the resources of the impressive Henley-based fixed income team, as well as the wider business,” the release said.
The equity element of the strategy will continue to be run by Ciaran Mallon.