Square Mile Investment Consulting & Research has added three funds to its Academy, suspended three after key manager exits, and stripped one of its ‘Positive Prospect’ rating due to a change in ownership.
TwentyFour’s Income and Asset Backed Opportunities funds were awarded ‘AA’ and ‘A’ ratings respectively. The £884.7m closed-ended Income trust earned its ‘AA’ rating for its high-yield exposure to European asset-backed securities (ABS), including illiquid and unrated private assets.
It has made 73.9% over 10 years, although this ranks as lowest in the AIC IT Debt – Structured Finance sector.
Meanwhile, the open-ended Asset Backed Opportunities fund received its single ‘A’ rating for offering higher-yielding bonds while avoiding non-rated and private assets.
It fell short of an ‘AA’ rating due to its smaller asset base and shorter track record, although notably topped the rankings of the IA Specialist Bond sector over both three and five years, generating 34.6% and 49.5% respectively.
Square Mile also awarded the Premier Miton Tellworth UK Select fund an ‘A’ rating, noting that it “exhibits all the main characteristics” that are “desirable” in an absolute return fund.
Analysts pointed to the strategy’s “impressive” track record, with the fund delivering 28.5% over 10 years.
At the other end of the spectrum, Square Mile removed its ‘Positive Prospect’ rating from the Downing European Unconstrained Income fund, following news that the strategy is being transferred over to Tyndall Investment Management.
Although the portfolio managers – Mike Clements and Pras Jeyanandhan – and investment approach are unchanged, analysts flagged their concerns around the new corporate environment and operational support as reasons to withdraw the rating.
The fund is set to be rebranded as the VT Tyndall European Unconstrained Fund.
The research firm also suspended ratings on four strategies offered by Baillie Gifford and BNY Mellon due to key manager departures.
Baillie Gifford’s Shin Nippon and Japanese Smaller Companies had their ‘A’ ratings suspended following the exit of lead manager Praveen Kumar, while BNY Mellon’s Real Return fund was suspended after co-lead Andy Warwick and strategist Brendan Mulhern announced their departures.
In all cases, the Square Mile analysts said they will need to assess the impact of these leadership changes before reinstating ratings.
The Goldman Sachs Emerging Markets Equity Portfolio fund held on to its ‘A’ rating, despite the departure of co-manager Hiren Dasani, with analysts citing the strategy’s stable and team-based approach.