obsr gives global funds the thumbs up

More than three-quarters of the global funds rated by OBSR at their latest meeting were upgraded, with four global equity funds deemed worthy of a higher rating.

obsr gives global funds the thumbs up


Out of nine funds rated, seven received upgrades, while only two – the Craton Capital Precious Metal Fund and PIMCO High Yield Bond Fund – were downgraded.

Two global fund offerings from Veritas have now achieved AAA ratings, up from AA – the Global Focus Fund and Global Equity Income Fund.

The managers of both funds use a thematic framework to identify industries they believe will benefit from long-term structural drivers and then use company specific research to complement this approach.

OBSR said: “Preservation and growth of capital are considered to be of more importance than benchmark risk and the portfolios are managed with little regard to an index.”

Meanwhile, Aberdeen’s Global World Equity Fund jumped from an A rating to an AA rating, which OBSR said was a reflection of continuity from its Edinburgh-based management team and their "efficient utilisation of the firm’s global resources".

It added: "The teams quality bias and conviction-led portfolio construction whereby risk is viewed in absolute terms rather than relative to the fund’s index has served investors well."

BNY Mellon’s Global Equity Higher Income Fund has also been boosted to AA from an A rating, which the ratings agency puts down to manager James Harries’ strict approach to yields.

"Harries’ approach targets stocks exhibiting a prospective yield greater than 1.25 times the FTSE World index," OBSR explained, "This high-yield approach typically provides sturdy protection of investors’ capital during downward-trending markets.”

"More importantly Harries’ process has demonstrated sufficient participation during positive markets to deliver a pleasing risk-reward profile over a full market cycle."

Another BNY Mellon fund, the Long-Term Global Equity Fund run by Walter Scott, one of the boutique firms within the group saw its rating go from A to AA.

OBSR said its conviction in the fund has grown as the management team have consistently applied their process of bottom-up research and demonstrated their ability to outperform using a long-term, low turnover approach to managing money.

Finally, the First State Global Listed Infrastructure Fund and the M&G Global Dividend Fund were also bumped up to AA from A.


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