Morningstar knocks Kames fund down a peg

Added 13th September 2017

Ratings agency Morningstar has demoted the Kames Ethical Equity Fund over changes to the core UK equity team and a “lessened” conviction in manager Audrey Ryan.

Morningstar knocks Kames fund down a peg

Changes to key personnel within the fund group's UK equity team, including the departure of UK Equity Absolute Return manager David Griffiths, and weaker recent performance from Ryan's vehicle prompted Morningstar analysts to demote the fund from a Silver to a Bronze rating.  

Although the team of analysts indicated that the Kames Ethical Equity Fund “remains a good way for ethical investors to gain exposure to UK equities” it admitted that its “conviction level has reduced slightly”.

The departures of Peter Shaw and Griffiths and following promotions of Stephen Adams to head of UK equities and Philip Haworth to deputy head of equities were highlighted as moves that “slightly reduced our positive view of the team,” which Morningstar said “had been extremely stable”.

The ratings agency also expressed concerns over the recent “weak relative returns” under Ryan, who has managed the fund for 15 years.

Although her long-term performance track record remains good against the UK-Flex Cap Equity Morningstar category and the FTSE All-Share Index, there is less evidence that the recent stock selections she has made have been beneficial, explained Morningstar associate director Simon Dorricott.

“Ryan makes good use of the team’s stock research and thematic views when constructing the portfolio,” but the ethical mandate of the fund may prevent her from following the UK equity team’s highest conviction ideas, he said.

Meanwhile, Morningstar analysts promoted the JP Morgan Pacific Equity and Pacific Securities funds from Neutral to Bronze ratings because of its growing conviction in the quality/growth bias employed by lead manager Aisa Ogoshi.

The firm also placed the currently Silver-rated Investec Asia ex Japan Fund under review, following its decision to swap out manager Greg Kuhnert for Charlie Dutton and alter its investment approach by 1 October 2017.

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About Author

Kristen McGachey

Senior Reporter

Kristen joined Last Word Media and the world of financial journalism in April 2016, leaving behind a career in a legal publishing firm as a senior researcher turned assistant editor.

This native Angelino initially moved to the UK in 2008 to complete her undergraduate studies at the University of Nottingham. She subsequently obtained a Masters degree in Philosophy with Literature from the University of Warwick.



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