Just one upgrade results from Morningstar fixed income review

The rising interest rate environment has created increased increase in fixed income strategies but major ratings house Morningstar has seen fit to upgrade only one fund manager in its 2022 fixed income fund manager review.

The results of the review revealed that the one strategy which achieved a rating upgrade in the review was the Western Asset Global Bond A strategy which was upgraded from Silver to Bronze, while the ratings house downgraded six strategies.

“After completion of the 2022 fixed-income fund manager annual reviews, one strategy achieved a rating upgrade owing to increased conviction in its investment team and research capability,” the Morningstar analysis said.

“We downgraded six strategies owing to reduced confidence in the investment team, diminished conviction in the investment processes, or lower assessment under our enhanced ratings system because of expensive fees.”

Explaining the Western Asset Global Bond upgrade, Morningstar said it reflected the stability and success of its global investment group “which has shown commendable quality beyond its renowned US team.

Where downgrades are concerned, Morningstar named the Colchester Global Government Bond A fund, the FirstChoice Wholesale Fixed Interest fund, the Franklin Templeton Multisector Bond W, the Macquarie Australian Fixed Interest, the Schroder Fixed Income Fund – Wholesale and the UBS Diversified Fixed Income Fund.

Morningstar said it had initiated coverage of the CFS Wholesale Index Australian Bond fund at Bronze, the Neuberger Berman Strategic Income W fund at Silver and the Pendal Sustainable Fixed Interest fund at Neutral.