In total, eight funds were assigned a ‘buy’ rating by the managed portfolio service provider, including Baillie Gifford European, JPM Global Macro Sustainable, Comgest Growth Japan, Premier Miton European Opportunities, Slater Growth, L&G Fixed Interest Trust and Royal London Global Bond Opportunities.
Charles Younes, research manager at FE Investments, said: “We have been impressed by Baillie Gifford’s Global Stewardship fund, not only in terms of performance, but how they are factoring in ESG principles into their decision-making.
“Any company that generates more than 10% of its revenues from a proscribed list of industries is excluded, while positive screening is also used, ensuring only companies that make a positive contribution to society are eligible for inclusion.”
He added: “The team is well-balanced too, with six regional managers and three sustainability analysts contributing to stock selection. It is also competitively priced among its peers with an OCF of 0.53%.”
Commenting on the addition of the Comgest Growth Japan fund to the Approved List, Younes said its performance had also been “impressive”.
“Not only is the fund run by three FE fundinfo Alpha Managers, it has a good history of offering downside protection, while having in place a strong ESG process which analyses the risk of any potential investments.”
FE Investments has removed the Ninety One Enhanced Natural Resources fund and the Man GLG Strategic Bond fund from its Approved List, “for strategic and performance-related reasons”.
In March this year, Ninety One revealed to Investment Week it had merged the £53.3m Global Energy and £44.8m Enhanced Natural Resources funds into the Ninety One Global Environment fund in response to “a shift in investor appetite” which had caused AUM to decline.
“Although this fund has the same objective, the approach is very different and has a different management team, so the decision was taken to remove, rather than replace,” Younes said.
He added that while the long-term track record of the Man GLG fund had been good, recent performance had not been in line with expectations.
“The fund was caught on the wrong side of the market sell-off in 2020 after it removed all its hedging just before the Covid-19 pandemic hit markets. The manager then took a very defensive approach and so failed to benefit from the subsequent recovery,” Younes said.
“Since the sell-off, the fund has also shown signs of style drift and its recent use of credit default swaps to hedge credit risk has been unsuccessful.”