The research firm’s analyst rating is forward-looking. On an annual basis, analysts review and if necessary re-rate the funds on a five-tier scale with three positive ratings of Gold, Silver, and Bronze, a Neutral rating, and a Negative rating.
The analyst rating differs from the firm’s backward-looking “star rating”, which assigns 1 to 5 stars based on a fund’s past risk- and load-adjusted returns versus category peers.
The Analyst Rating is based on the analyst’s conviction in the fund’s ability to outperform its peer group and/or relevant benchmark on a risk-adjusted basis over the long term. If a fund receives a positive rating of Gold, Silver, or Bronze, it means Morningstar analysts think highly of the fund and expect it to outperform over a full market cycle of at least five years.
1. Parvest Equity Russia P C
The fund was previously Under Review following a change in ownership of the parent company. The fund used to be managed by TKB BNP Paribas Investment Partners, a joint venture between BNP Paribas Investment Partners and non-state pension fund Blagosostoyanie, a financial structure controlled by Russian Railways. In June 2015, both parties exited the company, and Anatoly Grigorievich Gavrilenko, a private investor and chairman of the supervisory board of Alor Group, consolidated a 100% stake.
Although we think the new owner can help grow (pension) assets under management, which may be a good incentive to retain the experienced investment team, we have seen one senior portfolio manager leave recently. In addition, BNP Paribas Investment Partners may at some point choose another investment advisor for its fund. We prefer to take a cautious stance for the time being.
— San Lie, Head Research Benelux
2. Fidelity Gl Infl Link Bd A-Acc-USD
Following the news that Jeremy Church, co-manager of Fidelity Funds – Global Inflation Linked Bond fund, is leaving Fidelity, we have placed the fund Under Review. The fund previously held a Bronze rating. Lead manager, Andrew Weir, who has managed the fund since launch in May 2008, will take over as sole manager of the fund. We will be meeting with Weir in due course to discuss his future plans for the fund.
— Ashis Dash, CFA, Manager Research Analyst
3. Jupiter JGF European Gr L EUR Acc
The fund previously held a Silver rating. The fund has many of the features we like to see: a talented, long-standing manager in Alexander Darwall, a diligent investment process that has been proven through time and a consistency of approach on which investors can rely. The manager’s approach yields an intrepid portfolio that is characterised by large stock, sector and country bets, given its unconstrained nature, and while these are all sources of risk, Darwall’s experience investing through different market conditions gives him the confidence and skillset one needs to run this type of strategy well.
That said, investors should be mindful of the potential for sharp performance swings along the way.
— Muna Abu-Habsa, Senior Manager Research Analyst