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Aviva UK equity income fund loses rating after manager resigns

06 November 2023

Square Mile has removed the Aviva Investors UK Listed Equity Income fund from its Academy of Funds following portfolio manager James Balfour’s resignation.

By Emma Wallis,

News editor, Trustnet

Square Mile Investment Consulting and Research has removed its A rating from the £802m Aviva Investors UK Listed Equity Income fund after manager James Balfour resigned.

Balfour spent 11 years with Aviva, initially as an equity analyst then since 2016 as a fund manager. His resignation comes after a period of paternity leave.

Chris Murphy, the fund’s other co-manager, is on a leave of absence after 17 years with Aviva, which prompted Hargreaves Lansdown to remove the fund from its Wealth Shortlist last month.

Aviva Investors' head of UK equities Trevor Green has become interim portfolio manager of the UK Listed Equity Income fund, supported by Charlotte Meyrick and Ed Kevis.

The firm is recruiting experienced UK equity portfolio managers to strengthen its team, a process than began before Balfour's resignation.

Aviva's UK Listed Equity Income fund is top quartile for one year, third quartile over three years and second quartile over five years compared to its peers in the IA UK Equity Income sector.

Performance of fund vs sector over 5yrs

Source: FE Analytics

Separately, Square Mile has removed the £977m abrdn Global Inflation-Linked Bond fund and the £327m abrdn Short Duration Global Inflation-Linked Bond fund from its Academy of Funds. “Given the continued limited active risk in these funds, they no longer believe they provide a compelling enough case for active management in this asset class,” the ratings provider said.

Meanwhile, the £1.8bn Fidelity Sustainable Moneybuilder Income fund and the £351m Fidelity Short Dated Corporate Bond fund have had their A ratings reinstated. Their ratings were removed in January due to lead manager Sajiv Vaid’s retirement.

Square Mile said its analysts “have been pleased with the continuity of management through the funds’ longstanding manager Kris Atkinson and the addition of Shamil Pankhania”.

Vaid also ran the £280m Fidelity Extra Income fund, which has lost its A rating. “The analysts’ conviction in this fund has been waning for some years, given disappointing relative performance as well as considerable changes to the fund’s management team,” Square Mile explained.

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.