OBSR updates global fund ratings

Further ratings changes have been announced by OBSR following its Global Funds Ratings Meeting in October.

The new ratings are outlined in the table below:

Fund Name

Prior Rating New Rating Effective Date Movement Domicile
Aberdeen Global World Equity A AA 31/10/2011 Upgrade Luxembourg
BNY Mellon Global Equity Higher Income A AA 31/10/2011 Upgrade Ireland
BNY Mellon Long-Term Global Equity A AA 31/10/2011 Upgrade Ireland
Craton Capital Precious Metals AA A 31/10/2011 Downgrade Liechtenstein
First State Global Listed Infrastructure A AA 31/10/2011 Upgrade UK
M & G Global Dividend A AA 31/10/2011 Upgrade UK
PIMCO GIS High Yield Bond AA A 31/10/2011 Downgrade Ireland
Veritas Global Focus AA AAA 31/10/2011 Upgrade Ireland
Veritas Global Equity Income AA AAA 31/10/2011 Upgrade Ireland

Aberdeen Global World Equity

OBSR has upgraded the Aberdeen Global World Equity fund to an AA rating. The fund previously held an A rating. The upgrade is a reflection of continuity with respect to the core portfolio management team based in Edinburgh, and their efficient utilisation of the firm’s global resources. The team’s quality bias and conviction led portfolio construction whereby risk is viewed in absolute terms rather than relative to the fund’s index has served investors well. While this approach and the concentrated portfolio yields a higher tracking error than some global equity peers, the team has demonstrated a consistent ability to add value through their process.

BNY Mellon Global Equity Higher Income

OBSR has upgraded the BNY Mellon Global Equity Higher Income fund to an AA rating. The fund previously held an A rating. Fund manager James Harries’ approach targets stocks exhibiting a prospective yield greater than 1.25 times the FTSE World index. The dividend threshold results in the manager favouring companies with disciplined corporate management that have the capacity to meet their proposed dividend payments. This high-yield approach typically provides sturdy protection of investors’ capital during downward-trending markets. More importantly, Mr Harries’ process has demonstrated sufficient participation during positive markets to deliver a pleasing risk-reward profile over a full market cycle.

BNY Mellon Long-Term Global Equity

OBSR has upgraded the BNY Mellon Long-Term Global Equity fund to an AA rating. The fund previously held an A rating. The fund offers investors exposure to a portfolio of global equities managed by Walter Scott, one of the boutique firms within the Mellon group. The managers use a long-term, stock picking approach, which aims to identify real growth opportunities within companies and invest in them at a reasonable price. They have a disciplined investment process that is based on thorough fundamental, bottom up research. OBSR’s conviction in the fund has grown as the management team have consistently applied their process, shown an in-depth knowledge of the companies in which they have invested and demonstrated their ability to outperform using the long-term, low turnover approach to managing money.

Craton Capital Precious Metal

OBSR has downgraded the Craton Capital Precious Metal fund to an A rating. The fund previously held an AA rating. OBSR continues to have confidence in the team’s ability to add value through stock selection in primarily smaller-cap gold producers and this is reflected by the continued inclusion of the fund in the Service. However, after a broader review of the sector, OBSR believes the moderated A rating is a more appropriate reflection of OBSR’s expectations from the fund in terms of risk and reward.

First State Global Listed Infrastructure

OBSR has upgraded the First State Global Listed Infrastructure fund to an AA rating. The fund previously held an A rating. This reflects OBSR’s high opinion of fund managers Peter Meany and Andrew Greenup, particularly their ability to navigate the portfolio through changing market conditions. OBSR also likes the disciplined application of the process that relies primarily upon relative value assessments based upon detailed company analysis and modelling. OBSR’s conviction is further underpinned by the unusually well-resourced investment team.

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