4 Funds With Reeling Pillar Ratings

Here are four funds whose People and/or Process ratings were slashed in the past three years after their prospects went from bullish to bleak.

T. Rowe Price New Asia

We downgraded T. Rowe Price New Asia’s PRASX People rating to Below Average from Average, and its Process rating was cut to Average from Above Average.

Concerns arose following a string of short-term trades under lead portfolio manager Anh Lu. For example, the team bought New Oriental Education EDU in early 2024 after a rally, sold it months later as it fell, bought it again after another rebound, and then sold it in 2025, citing geopolitical concerns. Such trades hurt total returns for the year ended June 2025, with little evidence that company fundamentals had changed enough to justify the moves.

Uncertainty increased with the announcement of Lu’s retirement effective June 2026. Jai Kapadia will take over, but he steps in amid elevated turnover among the firm’s Asia-focused analysts and managers.

BNY Mellon Global Real Return

We downgraded BNY Mellon Global Real Return’s DRRAX People rating to Below Average from Above Average in May 2025 after major team changes at subadvisor Newton Investment Management. In all, five of the nine dedicated team members departed.

Comanager Andrew Warwick left, and head of fixed income Ella Hoxha and equity manager Nick Pope joined lead manager Aron Pataki. Neither new comanager had direct multi-asset portfolio management experience, and Pope has a relatively short track record. Unlike the prior team, which focused solely on this fund, several current team members split time with other funds. The reduced focus raises questions about execution in a complex multi-asset fund.

Fidelity Leveraged Company Stock

In October 2024, we downgraded Fidelity Leveraged Company Stock’s FLVCX Process rating to Below Average from Average. The fund produced high volatility and poor risk-adjusted returns.

The fund invests primarily in companies that have higher debt or credit ratings below BBB and typically keeps 65% to 80% of assets in such stocks. The structure builds in more risk than most funds in the large-blend Morningstar Category. Moreover, management adds in some holdings that have little debt, which is not consistent with the fund’s mandate.

Invesco Real Estate

Invesco Real Estate REINX has endured so much change that we cut its People and Process ratings to Below Average in October 2025.

Over the past six years, successive lead portfolio managers—Joe Rodriguez, Darin Turner, and now Craig Leopold—have imposed markedly different playbooks that disrupted process continuity. Rodriguez typically held sector weightings within 150 basis points of the FTSE Nareit All Equity REITs Index. Turner reversed course, raising risk via greater position concentration and allowing sector deviations of 500 basis points or more. Current lead manager Leopold is attempting to reduce overlap between macro views and security selection inputs by tightening the stock-picking process. Yet, formal portfolio construction guidelines for position-sizing or sector bands remain absent.

The result is a lack of consistent investment discipline owing to style changes and shifting benchmark deviations that don’t have a stable rationale. The frequent swings have led to consistently bad results as returns are in the bottom quartile over nearly every trailing period.

This article first appeared in the March 2026 issue of Morningstar FundInvestor. Download a complimentary copy of FundInvestor by visiting this website.