RSMR has given six Invesco fixed income funds a clean bill of health after it was announced the team’s heavyweight co-heads were leaving the business, bucking the trend of other ratings firms that have dropped or suspended rankings.
Last month, Invesco announced veteran duo Paul Read and Paul Causer would be stepping down from leading the £26bn Henley fixed income team at the end of this year, handing leadership to Michael Matthews and Thomas Moore.
Causer (pictured) is a co-manager on 10 Invesco fixed income funds, according to Trustnet, including the Invesco Tactical Bond and Invesco Distribution funds. Read on the other hand stepped down in July last year as named manager on the £2.3bn Invesco Monthly Income Plus fund, as well as the £2bn Distribution and £611.9m Tactical Bond funds, all three of which he ran with Causer and Ciaran Mallon.
Matthews has worked with Causer and Read for more than 25 years, having joined the team in its infancy. He currently co-manages the Invesco Corporate Bond fund with Causer.
Moore joined Invesco five years ago having previously led the European credit research team at Morgan Stanley. He manages the Invesco High Yield fund.
RSMR keeps rating on six funds
In a research note seen by Portfolio Adviser, RSMR said it has kept its rating on six of Invesco’s fixed income funds after meeting with the team following the announcement. These are: Invesco Corporate Bond, Invesco Distribution, Invesco Monthly Income Plus, Invesco Tactical Bond, Invesco Global Bond and Invesco High Yield.
The RSMR research team said: “Since the announcement we have met the prospective co-heads of the team and all of the lead fund managers on the funds which we rate. In our opinion, the Invesco team is solid, and they are recruiting a number of experienced analysts to make the team stronger.
“We will, therefore, maintain the RSMR ratings on the above funds. They will continue to be monitored, as are all our rated funds.”
Other ratings firms downgrade or suspend ratings
But other fund ratings groups have used the departure of Causer and Read to downgrade or suspend ratings.
Square Mile has suspended two and downgraded three Invesco funds in its latest monthly fund ratings review.
It suspended its rating on Invesco Tactical Bond and Invesco Distribution funds, having previously been rated AAA and AA, respectively. It has also reduced the rating on Invesco Corporate Bond from AAA to A, Invesco Sterling Bond from AAA to A, and Invesco Monthly Income Plus from AA to A
Square Mile’s analysts said that the impact of Paul Causer’s departure is likely to be more heavily felt in those funds where asset allocation is more significant to the way the funds are managed.
Ratings were therefore suspended on the Invesco Tactical Bond and Invesco Distribution funds, pending review meetings with the newly announced management teams when they assume responsibilities in January 2022.
FundCalibre retained its elite rating on the Invesco Corporate Bond fund because Matthews has been co-manager for more than eight years on the strategy.
However, it stripped the Invesco Monthly Income Plus fund of its elite status due to having not met with Rhys Davies who has only been co-manager since last year. Fundcalibre is due to meet with Davies on 8 July.
Commenting at the time, Fundcalibre managing director Darius McDermott said: “The news of the joint retirement is a blow for investors, as they have worked together for many years very successfully and Invesco is losing a wealth of experience from the team. But it isn’t a big surprise – Paul Read had already moved away from a number of funds.
“Invesco still has a very strong fixed income team, which has been built up methodically over the years. This, combined with the fact that both Pauls will remain in-situ until the end of this year, means we believe investors can take their time to decide if they want to stick with the funds or move elsewhere.”
Morningstar has placed Invesco Global Income under review after it was announced the strategy will be managed by its current co-managers Alexandra Ivanova and Stephen Anness after Causer and Read depart.
Morningstar associate director of manager research Matias Möttölä said at the time: “In order to better assess the effects of the changes to the running of the strategy and the way the fixed-income team operates going forward, we are putting the fund to under review.”
