Morningstar OBSR has downgraded five Thames River multi-manager funds from “silver” to “bronze” ratings.
The £46.3m Thames River Global Boutiques, £108m Thames River Equity Managed, £88m Thames River Balanced Managed, £245m Thames River Cautious Managed and £613m Thames River Distribution funds have all been downgraded.
Morningstar OBSR says: “While we acknowledge the experience and strength of the Thames River team and the consistency of its investment process, the funds’ return profile has become less compelling relative to peers.
“The volatile and macro-driven market conditions of the last few years have been challenging and we think the team’s main strength is in fund selection rather than asset allocation.”
Thames River co-head of multi-manager Rob Burdett (pictured) says: “We did have a difficult 2011 and ironically, the macro decisions we had last year largely came to the fore this year. It is one of the reasons why the funds are faring better this year so far.”
Burdett says the team has taken short-term FTSE future positions to tackle market volatility.
He adds: “It is a shame to go down a notch in the ratings, but we are already making good progress to justify climbing the ladder at some point.
“We want to keep the momentum in the short-term to keep performance going.”
F&C UK sales director John Yule says: “Performance across these funds has been impacted by the macro-economic environment, which has not benefited the managers’ long-term preference for stock-picking funds.
“However, we remain confident in the investment processes of these funds, particularly given the performance delivered by the managers over the long term, which has provided stable returns to investors.”
Hargreaves Lansdown head of research Mark Dampier says: “I think the team’s record is fine and it is a safe pair of hands. It shows how much competition there is in the multi-manager space now.”