Fund research firm RSMR has removed ratings from six funds in its March review, namely owing to performance concerns.
The largest to be stripped of its rating was Abrdn Asia Pacific Equity. Analysts at the firm said the £834m fund’s poor performance relative to its peers was cause for concern.
It was a bottom-quartile performer over the past decade, with the fund’s 71.3% total return over the period trailing behind the 99.2% gain made by its peers in the IA Asia Pacific Excluding Japan sector.
This underperformance also persisted over the short term. The fund was down 16.1% over the past three years, which was more than twice as steep as the 7.3% loss made by its peers.
Abrdn Asia Pacific Equity has been under the same management for this entire period, with Flavia Cheong heading up the fund since 1996. She was joined over the ensuing years by Louis Lu, Pruksa Iamthongthong, James Thom, and Christina Woon.
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Other funds to have lost their ratings over performance concerns included Baillie Gifford Global Discovery, Barings Eastern Europe, and FSSA Japan Focus.
The biggest decline over the past decade came from the Barings Eastern Europe fund. It was suspended after Russia’s invasion of Ukraine in 2022 and has made a negative return of 8.1% over the past 10 years as a result.
Other notably poor performance came from Baillie Gifford Global Discovery, which made a total return of 51.9% over the past decade. It peaked at 326.6% in early 2021, and has since dropped six-fold by 274.7 percentage points.
Researchers at RSMR also removed their rating for the JOHCM UK Dynamic due to the upcoming departure of Alex Savvides, which he led since 2008. Likewise, ratings on the Schroder UK Dynamic Smaller Companies fund were also stripped owing to a change of management.
In addition to these six removals, RSMR is also reviewing six other funds to access whether they are still deserving of their ratings.
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Proposed management changes at Fidelity Global Special Situations and Aviva Investors UK Listed Equity Income have put them under scrutiny by the firm, while performance is the primary concern for two Federated Hermes funds – Global Emerging Markets Equity and Global Emerging Markets SMID Equity – and a pair of T Rowe Price portfolios – Asian Opportunities Equity and Japanese Equity.
Analysts only awarded a new rating to one fund in March. The TM Tellworth UK Select was up 35.3% over the past decade, climbing 11.5 percentage points ahead of the IA Targeted Absolute Return sector average.
It dipped into the red early during this sample period, but performance picked up over the past five years, soaring 48.8% versus its peer group’s 16.2% return.
This article was written for our sister title Portfolio Adviser
