Square Mile awards three new A ratings to funds in June
The research team at Square Mile Consulting and Research has awarded new ‘A’ ratings to GAM Star Japan Leaders, Royal London Short Duration Gilts and Liontrust UK Growth in the latest monthly rebalance of its Academy of Funds.
Elsewhere, Allianz Index-Linked Gilt was upgraded from a ‘Positive Prospect' to an ‘A' rating, while Aberdeen Standard Investments' MyFolio Multi Manager, Managed and Market range of funds retained their ‘Recommended' ratings, despite the fact co-manager and head of multi-asset Bambos Hambi is leaving the business. The firm's Global Smaller Companies fared less well though and saw its rating suspended, following the recent announcement its manager Alan Rowsell will be stepping down and replaced by its former manager Harry Nimmo.
Square Mile's team of analysts, which conducted 76 interviews with management teams across 35 fund houses over the course of June, first decided to award Anthony Cross and Julian Fosh's £483m Liontrust UK Growth fund an ‘A' rating at the start of the month.
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The fund's Economic Advantage investment process is held in "high regard" by the research team, which added it should "sit well alongside its already-rated multi-cap and smaller companies-focused counterparts within the Academy of Funds".
The £941m Royal London and GAM funds were rewarded A ratings and a place in the Academy on the 25 and 26 June respectively. The team said the former, which is co-managed by Craig Inches and Ben Nicholl, is one of only two open-ended funds that provides exposure to the zero- to five-year portion of the gilt market, which is an attractive asset class at the moment given its lower level of interest rate risk.
Square Mile said although it has lagged its FTA <5 Years Gilts index over time, it "welcomes the recent updates to the investment process" and said this underperformance is now narrowing.
"The managers have a good chance of delivering their index outperformance objective, net of fees, in the years ahead, in Square Mile's view," it added.
In terms of GAM Star Japan Leaders, the team said it is run by "two experienced managers" - Ernst Glanzmann and Reiko Mito - who have followed their high-conviction investment approach since 2008.
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"Given Japanese market conditions over that period, in Square Mile's view very few investors have matched their success," it explained. "The fund has a differentiated strategy, offering investors access to a selection of leading Japanese companies and Square Mile believes the managers' ability to identify attractive opportunities sets this fund apart from many of its peers."
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