Six funds have lost their five-crown rating from FE and been bumped to a one-crown rating, in FE’s rebalance of its ratings.
The bi-annual rebalance sees a number of funds rise and fall through the rankings. Standard Life Investments UK Equity Recovery was one fund to drop from a five-crown rating to a one-crown rating. Also among the largest fallers were Canlife Total Return, Octopus Global Growth and MFM Techinvest Technology funds.
In total 152 funds have lost more than two crowns in the rebalance, including big name funds such as Neptune Japan Opportunities, SLI UK Equity Unconstrained and Invesco Perpetual Tactical.
This rebalance is the first since FE switched to using clean share classes as the basis for its fund rating system.
The rebalancing also saw 13 funds that were previously unclassified, due to lack of three-year track record, jump to the top spots. This included the CF Miton UK Smaller Companies, the Old Mutual Global Equity Absolute Return and the Standard Life Investments Emerging Market Debt funds.
Six funds rose by four stars to be awarded the five-crown rating, including Lindsell Train Japanese Equity, M&G Episode Macro and Marlborough European Multi-Cap.
Standard Life Investments, Premier Asset Management, Invesco Perpetual and Henderson Global Investors all jointly had the largest number of five-crown funds, at 11 each. Followed by F&C and First State Investments with 10 funds in the top spot.
Charles Younes, research manager of FE Research, says: “The new ratings reflect an uptick in the number of cautious or defensive funds gaining crowns, with them having generally outperformed their benchmarks over the past few years.
“Looking ahead, in this low growth-low inflation environment, structural growth and high cash yield stocks should continue to perform well. And I imagine a lot of the funds which have achieved the higher crown ratings will continue to rate highly.”
Growth funds have performed better in the volatile markets of the past six months, says Michael Holland, managing director of FE.
He says: “Worries over China’s economic slowdown, a dive in commodity prices and geopolitical issues have all affected investor sentiment and thus translated into market chaos.”