Square Mile relegates two Fidelity funds as manager prepares to retire

While River & Mercantile’s European strategy gets an upgrade


A pair of Fidelity funds have been downgraded in Square Mile’s Academy of Funds ratings report for November.

The latest rating decisions were made after Square Mile conducted 72 interviews with investment professionals from 40 asset management groups over the course of November.

The Fidelity Moneybuilder Dividend and Enhanced Income funds are now a ‘positive prospect’ following fund manager Michael Clark’s decision to retire at the end of 2022. He joined the firm in 2002 as an equity research analyst before becoming a portfolio manager in 2007.

Square Mile said the downgrade from an ‘A’ rating reflects the loss of experience that Clark brought to the funds, though they are confident his successor Rupert Gifford will continue to apply the funds’ long-standing investment approach.

The investment research firm gives the positive prospect rating to funds its analysts believe have the potential to be “highly compelling propositions”, but need more time to ensure the fund merits a full rating.

Elsewhere, the £105m River & Mercantile European Fund has been upgraded to an A from a positive prospect rating. Square Mile attributed the uplift to the abilities of fund manager James Sym.

The firm said: “The [Square Mile] analysts believe the fund offers investors access to a skilful manager who combines a business cycle approach with bottom-up stock analysis. He is willing to take a different view from the consensus and invest in areas of the market that are out of favour when he thinks the opportunity has a strong payoff potential.”

The £255.5m Comgest Growth ex UK has been bumped up to an ‘AA’ from an A. Over the last three years, the fund has delivered 7.1% compared to the 3.6% returned by its MSCI Europe ex UK benchmark.

Square Mile said: “[The analysts] have a high regard for the [Comgest] team, who are long-term investors with a quality growth approach, which has been applied consistently through different economic and market conditions across all the European strategies that they manage.”

See also: Franklin Templeton and Matthews Asia funds lose Square Mile ratings

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