Square Mile has removed its rating from the Royal London UK Equity Income fund after highlighting “subtle differences” in the approach taken by Martin Cholwill’s successor.
The £1.5bn fund’s rating was suspended back in February after longstanding manager Cholwill (pictured) announced his retirement. After a short transition period, Cholwill left Royal London Asset Management at the end of May, handing the reins to Richard Marwood.
In the latest Academy of Funds round-up, Square Mile said it had taken the “difficult decision” to strip the fund of its A rating.
While Square Mile noted Marwood’s “lengthy experience and track record” running UK equities, the firm said its rating was predicated on Cholwill’s involvement.
Its analysts also believe there will be some “subtle differences” in the way the fund is managed moving forward and “would therefore prefer to see how these evolve over the coming months than to continue with a rating at this juncture”.
“Once the changes in manager and approach have had time to settle in, [analysts] will review the fund and the broader team,” Square Mile said.
Royal London UK Equity Income has delivered comparable returns to its peers in the IA UK Equity Income sector, gaining 10.1% over three years versus the 11.1% average. Over the last three months under Marwood’s lead it has returned 3.5%, just higher than the 3.1% average.
Square Mile lifts suspension for recommended rating on Janus Henderson property fund
Square Mile also announced it had reinstated its recommended rating for the Janus Henderson UK Property Paif.
The £1.1bn fund was suspended last March, along with all the other major property funds, amid the Covid-led market downturn and remained closed until February this year.
After monitoring the fund’s re-opening, including its handling of redemptions, Square Mile said its analysts “felt comfortable with the liquidity management undertaken by Janus Henderson”. Cash levels in the fund are currently at 16.5%.
Elsewhere, three new funds were awarded A ratings. These were the Jupiter Corporate Bond fund, Premier Miton UK Growth fund and the Pimco GIS Dynamic Multi-Asset fund.
Meanwhile, the LF Montanaro UK Income fund attained a Responsible A Rating. Square Mile said co-managers Charles Montanaro and Guido Dacie-Lombard “successfully blend youth and experience,” adding the fund was an attractive proposition for investors seeking exposure away from UK blue chip companies, an ESG integrated approach and willing to accept higher volatility than the FTSE All Share over shorter time periods.
