Morningstar Analyst Ratings Change Summary Report (September)

SEP 2013

Analyst Notes

Aberdeen Global Latin America Equity A2
We have awarded the Aberdeen Global Latin American Equity fund a Morningstar Analyst Rating™ of Bronze. The fund is managed by the global emerging market team at Aberdeen, who we hold in high regard. The fund benefits from the experience of two senior investment managers, Fiona Manning and Nick Robinson. We also believe a key strength of the fund is the supporting team, which has demonstrated its ability to implement successfully Aberdeen’s long-term fundamental research process in the Latin American region. Their execution of a proven process has led to the fund’s strong track record since launch and we think the fund merits a Bronze Rating.
--Karine Glauser, Research Analyst

Baring Hong Kong China A USD Inc 
We have placed the Morningstar Analyst Rating™ for the Baring Hong Kong China fund Under Review following the announcement that lead manager Agnes Deng has left the firm. This fund was previously rated Neutral. Upon Deng’s departure, Laura Luo has been appointed as new head of Hong Kong China effective 12 September 2013. Luo joins Barings from Schroders, where she was the lead manager of the Bronze-rated Schroder ISF China Opportunities fund and proved to be a capable manager. We will be meeting with Luo shortly to discuss her plans for the fund and will issue an updated report following this meeting.
--Germaine Share, Research Analyst

Fidelity America A Acc USD
We have upgraded the Fidelity Funds America fund to a Morningstar Analyst Rating™ of Bronze. The fund previously held a Neutral Rating. The fund manager, Adrian Brass, has been managing the fund since January 2008 and we think he has developed well as an investor. We like the greater conviction Mr Brass has been bringing to the portfolio and the increased active management in the portfolio has benefitted performance in recent years. Mr Brass is the head of Fidelity’s new analyst team which is well resourced and this gives him considerable support in the management of the fund.
--Oliver Kettlewell, Research Analyst

Fidelity America Growth A Acc USD
We have downgraded the Fidelity Funds American Growth fund to a Morningstar Analyst Rating of Neutral. The fund was previously Under Review following the announcement that the former manager, Aris Vatis, had relinquished the management of this fund. The fund is now managed by Aditya Khowala, who joined the firm as an analyst in 2006. While we acknowledge that Mr Khowala has made changes to the investment process that have the potential to translate into long-term outperformance, a Neutral Rating is a more suitable reflection of our conviction in the strategy at the current time.
--Samuel Meakin, Research Analyst

Fidelity China Focus A USD
We have placed the Morningstar Analyst Rating™ for the Fidelity China Focus fund Under Review following the news that Martha Wang will step down as portfolio manager. The fund was previously rated Silver. We will be meeting with the new portfolio manager Jing Ning in the coming weeks to update the Morningstar Analyst Rating.
--Arne Hilke, Research Analyst

Fidelity India Focus A EUR
We have placed the Morningstar Analyst Rating™ for the Fidelity India Focus fund Under Review following the news that Teera Chanpongsang will step down as portfolio manager. The fund was previously rated Bronze. We will be meeting with the new portfolio manager Tim Orchard and investment advisor Sandeep Kothari in the coming weeks to update the Morningstar Analyst Rating.
--Arne Hilke, Research Analyst

Fidelity Indonesia A USD
We have initiated coverage of the Fidelity Indonesia fund with a Morningstar Analyst Rating™ of Bronze. Portfolio Manager Dhananjay Phadnis is a proven Indonesia investor, and has built a strong performance track record since taking charge of this fund in April 2008. He further benefits from the large and experienced Fidelity regional investment team. On that basis, we view the fund as a worthy option for investors seeking exposure to Indonesian equities.
--Arne Hilke, Research Analyst

Fidelity Singapore A USD
We have initiated coverage of the Fidelity Singapore fund with a Morningstar Analyst Rating™ of Neutral. Portfolio Manager Gillian Kwek is an experienced Singapore investor, having run this strategy since May 2006. However, we have some reservations about the benchmark aware approach combined with a high fee. With amongst the highest cost in the category we believe Fidelity Singapore may struggle to consistently beat peers and the custom benchmark on a forward looking basis.
--Arne Hilke, Research Analyst

Perkins US Strategic Value A USD Acc
We have downgraded the Perkins US Strategic Value fund to a Morningstar Analyst Rating™ of Bronze. The fund previously held a Silver Rating. There has been some turnover within the management team in recent years, which coincided with the deterioration of the fund’s performance profile. The presence of veteran manager, Tom Perkins, provides stability and we retain a positive view on the fund, although we believe a Bronze Rating is a better reflection of our conviction at the current time.
--Lena Tsymbaluk, Research Analyst

Robeco Emerging Markets Equities D EUR
We are downgrading the Robeco Emerging Markets fund to a Morningstar Analyst Rating™ of Bronze. The fund was previously rated Silver.  The fund benefits from a large, experienced investment team and a solid, proven investment process. The fund has done reasonably well, but the execution in recent years has not delivered to the level we would have expected, lowering our conviction in the fund somewhat.
--Han De Vries, Research Analyst

Schroder ISF Taiwanese Equities A
We are upgrading our Morningstar Analyst Rating™ for the Schroder ISF Taiwanese Equity fund to Silver from Bronze. Manager Louisa Lo has been at the helm for over a decade and brings 20 years of experience focused on Asian stock markets. In her time at this fund, she has deftly executed the investment process, delivering a stellar long-term track record for investors. We believe the Silver rating better reflects our strengthened conviction in Lo and her ability to execute the process at a high level.
--Germaine Share, Research Analyst

Threadneedle European High Yield Bond Return Gross EUR
We have upgraded the Threadneedle European High Yield Bond fund to a Morningstar Analyst Rating of Bronze.  The fund was previously Under Review following the announcement that Michael Poole was to take sole management of the fund from 1st May 2013 with the head of the high yield team, Barrie Whitman remaining involved in the strategy.  Mr Poole previously worked alongside Mr Whitman on the management of the fund, having joined the team in 2005.  Mr Whitman remains as the head of the high yield team and has established a close-knit dedicated team.   In our opinion, Mr Poole is a knowledgeable high-yield manager who benefits from the team’s experience and comprehensive investment process and a Bronze Rating is now appropriate for the fund.
--Marianne Weller, Research Analyst