Square Mile Investment Consulting & Research has stripped four investment strategies of their ratings and downgraded another. Meanwhile, four funds held on to their ratings and six new strategies entered the Academy of Funds in July.
Following changes within Schroders’ global value team – most notably, the departure of Nick Kirrage after more than 20 years at the firm – Square Mile analysts removed the ‘A’ ratings held by Schroder Income, Schroder Income Maximiser and Schroder Recovery last month.
Analysts said this decision “reflects their level of conviction in Kirrage”, whose departure represents a “material change” in the leadership of these strategies.
Kirrage’s departure followed the exit of Andy Evans earlier this year and Kevin Murphy in 2024, which further contributed to Square Mile’s reassessment of the fund range, they said.
The analysts retained the responsible ‘A’ rating held by the Schroder Global Sustainable Value Equity fund, however, which is run by Simon Adler, who replaced Kirrage as head of value equities.
BNY Mellon Real Return’s ‘A’ rating was also suspended following the news that co-manager Andy Warwick and long-standing members of the real return team – Brendan Mulhern and Matthew Brown – have left the business.
Square Mile analysts met with new co-managers Aron Pataki and Ella Hoxha and learned that the fund’s objective will remain the same. However, the strategy will now sit under a broader absolute return team, which the analysts said represents a “material” change.
As such, they would prefer to observe how the team transitions and develops the strategy, removing the fund from the Academy in the interim.
Elsewhere, following veteran fund manager Claudia Calich’s retirement as lead manager of the M&G Emerging Markets Bond fund, Square Mile downgraded its rating from ‘AA’ to ‘A’.
The analysts reiterated their confidence in Calich’s successor, Charles de Quinsonas, and his ability to lead the strategy and team. They cited his own “extensive experience” and long-term involvement with the fund, as well as the strong support on offer from the wider team.
Alongside Schroder Global Sustainable Value Equity, three other funds retained their rating in July.
This includes Premier Miton Tellworth UK Smaller Companies, which retained its ‘A’ rating, despite the departure of manager James Gerlis from the business.
The analysts said that the rating hinges on the ongoing involvement of Paul Marriage and John Warren, who are still involved in the strategy.
CCLA Better World Global Equity fund retained its ‘Responsible Positive Prospect’ rating within Square Mile’s Academy of Funds, despite being acquired by Jupiter Investment Management. The analysts said the acquisition is unlikely to have a “discernible impact” on the management of the fund.
The firm is expected to preserve its distinct identity and will likely benefit from Jupiter’s reputation and scale within the UK and international, the analysts said ahead of their scheduled review meeting with the CCLA team in September.
After M&G Episode Income was renamed to M&G Income and Growth, Square Mile analysts decided to retain its ‘A’ rating, noting that there was no material change to the philosophy of the team or the investment process.
Meanwhile, six new strategies have entered the Academy of Funds.
Capital Group Global Corporate Bond, launched in 2012, was awarded an ‘A’ rating. The core global corporate bond strategy is focused on investment-grade corporate bonds – avoiding exposure to high yield debt.
The analysts highlighted the credit research analysts responsible for building the portfolio, noting that they construct their segments of the portfolio “based on their highest conviction ideas”.
Campbell Absolute Return UCITS fund was also awarded an ‘A’ rating. It is a systematic multi-strategy fund with four core pillars that invest across multiple financial markets, delivering positive returns across a market cycle.
The analysts said: “Its all-weather approach allows the underlying team to source opportunities in all market conditions, and the group has a proven pedigree in this field, boasting a team of vastly experienced investors.”
Historically, the fund has been negatively correlated to equity and fixed income markets, the analysts added, but has protected capital in sustained market downturns.
Square Mile analysts believe the fund offers attractive diversification benefits for investors in a more unpredictable global economy.
Lastly, Waverton had four funds enter the Academy of Funds: Waverton Multi-Asset Defensive, Cautious, Balanced and Growth funds.
A ‘Positive Prospect’ rating was awarded to the Defensive, Cautious and Balanced funds, while the longer-standing Multi-Asset Growth fund was given an ‘A’ rating.
This follows the addition of the ‘A’-rated Waverton Multi-Asset Income fund into the Academy in 2023. Since then, the analysts’ conviction in the ability of lead manager James Mee and his supporting team has grown.
The newer fund range follows the same investment process as the Income fund, but each is targeting different levels of real returns over the long-term.