Square Mile noted that Columbia Threadneedle Investments had acquired BMO’s EMEA Asset Management business and decided to retain its ratings, but subsequently removed the ratings from the BMO Navigator Multi-Manager Range of funds as part of a broader review of the multi-asset sector.
It said that “while the funds benefit from an experienced and well-regarded team, Square Mile’s analysts lack the necessary long-term conviction to maintain the ratings. There has been a trend to outflows across higher cost offerings more generally, and Square Mile’s value for money analysis alongside a review of the portfolio’s structure has contributed to a decision to remove the ratings.”
Baillie Gifford UK Equity Alpha lost its fund rating due to the retirement of its long-standing manager Gerard Callahan, who will be replaced Milena Mileva from May 2022. Square Mile acknowledged that although Mileva has a closely aligned investment approach to Callahan’s, and has built a “highly promising track record over the limited time she has managed money”, there will be “some nuances” in how the fund is managed in the future.
“They would therefore prefer to see how these evolve over the coming months. Once the changes in manager and approach have had time to settle in, they will review the fund and the broader team once more. Square Mile noted Mr Callahan’s contribution to the industry and wishes him a long and happy retirement,” Square Mile analysts said.
To decide the ratings, the analysts interviewed 70 investment professionals from 29 asset management groups through the course of November. Five new ratings were given, one fund saw its rating upgraded, another was reintroduced to the ‘Academy of Funds’, and one rating was also retained.
The company awarded an A rating to the Dimensional European Value fund and the Brown Advisory US Mid-Cap Growth fund, a Responsible Positive Prospect rating to the Federated Hermes Impact Opportunities Equity fund and the Schroder Global Energy Transition fund, and a Responsible A rating to the Pictet Global Environmental Opportunities fund.
Square Mile upgraded the TwentyFour Corporate Bond fund from a single A rating into an AA rating, while reinstating the Allianz Strategic Bond fund into the Academy of Funds with an A rating.
It retained the A rating for the FTF Franklin UK Equity Income fund retains rating following the news that oversight for Franklin Templeton’s UK equities team, headed by Colin Morton, was moving to the Martin Currie platform.
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