Square Mile has added one new fund and stripped two ratings in its Academy of Funds update for March.
The fund research firm’s analysts conducted 58 interviews with investment professionals from 31 asset management groups during the month.
Both the £512m Baillie Gifford Japanese Income Growth and the £783m Fidelity Multi-Asset Income funds saw their ‘A’ ratings removed.
Square Mile analysts said their conviction in the Baillie Gifford strategy had fallen after recent performance did not meet their expectations.
“In addition, the analysts note decreasing levels of differentiation against the team’s flagship Japanese fund where they maintain their conviction and which they believe to be the purest representation of the investment team’s objectives,” they added.
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Fidelity Multi-Asset Income had its rating rescinded due to the retirement of manager Eugene Philalithis at the end of March, who has been succeeded by new lead manager Talib Sheikh.
Square Mile said it removed the fund from its academy while they assess how the changes impact the strategy going forward.
Columbia Threadneedle’s Global Social Bond fund entered the academy for the first time, receiving a ‘Responsible Positive Prospect’ rating.
“While the fund’s track record is short, having launched in June 2023, it leverages on the expertise within the CT Social Bond team in managing social bond strategies dedicated to Europe and the UK,” Square Mile analysts said.
“The UK Social Bond strategy has a history dating back to 2013 and the team has consistently produced returns in line with credit market benchmarks while delivering positive social outcomes.”
Elsewhere, Pimco Climate Bond was upgraded to a ‘Responsible A’ rating. The fund was launched in September 2020 and combines green bonds with corporate bonds issued from companies involved in mitigating carbon emissions in their respective industries.
Ratings retained
Waverton’s Sterling Bond and Multi-Asset Income have retained their A ratings despite the announcement of the company’s merger with London & Capital. The intention is to leave the strategies and their teams unchanged.
TwentyFour Strategic Income fund has held onto it ‘AA’ rating despite manager Mark Holman’s decision to retire at the end of June.
The analysts said that they maintain their conviction in the fund’s rating on account of the firm’s “strong resources, long-established investment process and highly collegiate team-based management approach”.
Co-portfolio managers Eoin Walsh, Felipe Villarroel, and David Norris remain in their roles and have worked alongside Holman for several years.
In the investment trust universe, the only rating change saw Troy Income & Growth Trust have it’s a rating suspended due to its proposed merger with STS Global Income & Growth.
