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Schroders and Axa IM dropped in FE rebalance

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Schroders and Axa Investment Managers are among seven managers that have been dropped from FE’s latest crown funds ratings list.

Vanguard, BNY Mellon, HSBC Global Investment Management, Jupiter Asset Management and Stewart Investors were also dropped from the list which charts the top 20 fund groups with the largest number of funds with an FE five-crown rating. All of these groups featured in the top 20 in January’s rebalance.

Architas and Pimco also faced a fall from grace as they came in second and third place, respectively, in January’s rebalance, but fell to number 20 and number seven in the latest reshuffle.

To get a crown rating, funds with more than a three-year track record are rated using an alpha based test, a volatility score and a consistency score. Funds are assigned ratings based on their total scores and the top 10% qualify for five crowns.

FE senior fund analyst Tanvi Kandlur (pictured) told sister publication Portfolio Adviser: “While the fund management groups have fallen off of the list, we have not found any particular trend contributing to their omission.”

In the research provider’s bi-annual rebalance, 366 funds were awarded the five FE crowns, including seven newcomers, less than half the number of newcomers in the last ranking in January.

Liontrust makes an appearance

Among the newcomers was Liontrust Asset Management which came in joint-second place with 11 of its funds out of 21 awarded the five FE crowns. T Rowe Price came in joint-second with 11 out of 38 funds, while Blackrock took the top spot with 12 of its 77 presented the accolade.

Kandlur said: “Many of Blackrock’s funds have seen upgrades at this rebalance reflecting the strong performance across the wide range of strategies the firm offers.”

FE fund analyst Sophie Meatyard said the Liontrust Sustainable fund range has performed particularly well over the last year.

“The funds have outperformed their respective benchmarks significantly, driven by their decisions to exclude oil and gas companies which has been a good call and for many funds, structural biases towards technology companies has been positive. On top of this stock selection for the individual funds has been excellent.”

Janus Henderson, Neptune Investment Management, Barclays and Valu-Trac Investment Management Limited also made the top 20 list, alongside Baillie Gifford and JP Morgan Asset Management UK which were both dropped from the list in January.

Source: FE

New entrants

In the latest rebalance, seven previously unrated funds achieved the highest ranking of five FE crowns, including the Axa World Funds Framlington UK, Blackrock Sterling Strategic Bond and Unicorn UK Ethical Income.

FE fund analyst Amy Kennedy said: “Having recently reached its three-year mark, Unicorn UK Ethical Income, like the unconstrained version, has benefitted from excellent stock selection by the team despite the headwinds that UK smaller companies have faced since 2016.”

The Liontrust UK Micro Cap Fund is a newly-rated fund and is starting with a five-crown rating. It is also the only newly five-crown rated fund to be on the FE Invest approved list.

Kennedy said: “As the fund reached its three-year mark, the team at Liontrust continue to demonstrate their excellent ability to select stocks despite the headwinds UK smaller-caps have faced since 2016. The team’s preference for technology companies as well as their growth style has helped too as both have been in favour over recent years.”

The VT Sorbus Vector, Vanguard Global Balanced and Vanguard Global Emerging were also in the list of seven.

 For more insight on UK wealth management, please click on www.portfolio-adviser.com

Sonia Rach

Sonia joined Last Word Media and the investment industry in 2017 as a reporter, having spent 3 years in HR journalism. While her role consisted of writing about HR related topics such as employee benefits,...

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