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Morningstar OBSR downgrades £1bn Invesco Perpetual European Equity

Morningstar OBSR has downgraded Jeff Taylor’s £1bn Invesco Perpetual European Equity fund owing to the portfolio’s “disappointing” returns against the risk taken.

The fund, which launched in January 1986, has been given a Morningstar OBSR Analyst Rating of ‘neutral’, down from the ‘bronze’ rating it previously held. It also holds a ‘gold’ S&P Capital IQ Fund Grading.

The fund analyst says: “Morningstar OBSR’s overarching concern regards the extent to which its manager, Jeff Taylor, has been able to successfully manoeuvre the fund in recent years, particularly since performance has been disappointing in the context of the degree of risk taken in the management of the fund.

“While Morningstar OBSR acknowledges Taylor’s experience in European equities, its conviction in his ability to add value over the benchmark in a meaningful way through time has waned.”

In addition, the group says a neutral rating is “a more appropriate reflection” of its conviction in the fund’s relative merits to the rest of its IMA Europe excluding UK peer group.

Responding to the downgrade, Invesco Perpetual says: ”Whilst [Taylor’s] willingness to stick to his investment principles and not follow the herd into what he believes are generally over-valued ‘safe haven’ stocks has clearly impacted fund performance, since the middle of last year there has been significant turnaround and the manager remains confident in his portfolio positioning.”

Invesco Perpetual European Equity’s performance by calendar year

Invesco Perpetual European Equity’s performance by calendar year
  YTD 2012 2011 2010 2009
Fund 13.41% 14.35% -16.19% 3.52% 16.16%
12.20% 19.03% -15.57% 8.57% 19.42%
1.08% -3.93% -0.74% -4.65% -2.73%
  27 / 105 92 / 103 56 / 100 78 / 99 62 / 89
1 4 3 4 3

Source: FE Analytics


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