Insights

From the monthly archives: April 2020

We are pleased to present below all posts archived in 'April 2020'. If you still can't find what you are looking for, try using the search box.

Rating suspension for the Matthews Asia Small Companies fund

We have decided to suspend the rating of the Matthews Asia Small Companies fund, following the announcement today of the departure of the lead manager Lydia So. Ms So has been managing the Asia Small Companies strategy (which includes a US domiciled version) since 2008, with notable success under her tenure. We wish her all the best. She will be replaced by Tiffany Hsiao, who was previously co-manager on this fund and who is the lead manager of the Matthews China Small Companies fund, which has a Positive Prospect rating. We are looking to have a discussion with Ms Hsiao in the coming weeks to understand her plans going forward and will update investors once we have more clarity in this regard.

Rating removal for the Invesco Global Financial Capital fund

Following a period of review we have decided to remove our A rating from the Invesco Global Financial Capital fund. This is a strategy we have been monitoring closely as we have been aware of outflows causing a decline in its level of assets and following a significant drawdown in Q1 2020, the fund's AUM currently stands below £20m. The fund has also produced a disappointing performance profile and has shown weakness against its composite benchmark for some time.

We appreciate the fund's specialist remit but given the concerns mentioned, we do not anticipate any significant investor demand for the strategy in the immediate future. We therefore feel it appropriate to remove the fund from our Academy.

Why have UK equities fallen behind?

While the Covid-19 disease is first and foremost having a devastating effect on human life, we turn our attention to the effect it is having on stock markets and specifically, the UK equity market. Over the first three and a half months of this year, the UK equity market has fallen more than all other major developed and developing equity markets, such as the US, Europe, Japan, Asia, including the Chinese market itself, which has ironically held up relatively well this year. Technology holding up well The performance of each investment sector on a global scale paints a much clearer picture as to what is going on, with the areas proving most defensive being healthcare, utility and the technology sectors. Although healthcare and utility sectors have long been associated with providing robust returns during times of crisis, owing to people still getting sick and having to keep the lights on, the technology sector is bit of an anomaly under these circumstances. However, looking at the nature of what is going ...

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Rating removal for Investec UK Special Situations and Investec Cautious Managed

Following the news that Alastair Mundy will be stepping down as manager of the Investec Cautious Managed and Investec UK Special Situations funds with immediate effect for an extended period of absence due to health reasons, we have decided to remove the Square Mile AA ratings from both funds.

As the architect and team head of Ninety One's Value franchise we believe that Mr Mundy is integral to the management of both the team and the funds. Therefore, we believe it is prudent to remove the ratings and allow the team to adapt to the change in structure and leadership.

We will continue to monitor the funds and would like to sincerely wish Mr Mundy well in his recovery.

Rating Change for the MI Somerset Emerging Markets Dividend Growth fund

Following a recent review of our emerging markets offerings, we have decided to downgrade the AA rating of the MI Somerset Emerging Markets Dividend Growth fund to an A rating. Although not disastrous, the fund has experienced some performance difficulties relative to its MSCI Emerging Markets benchmark, which has resulted in its manager, Ed Lam, making some subtle adjustments to his investment approach.

We retain conviction in the fund and Mr Lam's capability in meeting his objective of delivering attractive risk-adjusted returns to investors over the long run, but we now believe an A rating for this fund is more appropriate given its relative merits within what is a diverse and very competitive sector.

Rating removal for the Man GLG Innovation Equity Alternative fund

Following the news that fund manager Priyan Kodeeswaran is leaving Man GLG, we have removed our A rating on the Man GLG Innovation Equity Alternative fund. Although the fund's newly-appointed manager Mike Corcell, who joined Man GLG in October 2019, is known to us through his past employments, we believe it is prudent to remove the rating while we assess the likely changes to the fund's investment strategy.

Rating removal for Oyster Continental European Selection and Oyster European Selection funds

Having recently suspended our ratings in February 2020, we have now decided to remove the Oyster Continental European Selection and Oyster European Selection funds from our Academy. Whilst we have a high regard for the lead manager, Mike Clements, as well as his investment approach and process, there have been a number of recent developments, which we believe are notable. These include falls in the two funds' assets under management, some departures within the team and changes at the firm ownership level, with the recent announcement of iM Global Partner's intention to acquire Syz Group's Luxembourg based asset management business, which is awaiting regulatory approval. We have therefore taken a difficult decision to remove these funds, which Mr Clements is in charge of. We wish him and his team all the best in their future endeavours.

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