4 Key Fund Downgrades
Not everyone is a winner in our new ratings methodology.
Russel Kinnel: Our new ratings methodology changes are leading to some downgrades of pricier funds in volatile categories where we formally gave some slack if the pillars were strong. Let’s look at four of these. Invesco Asia Pacific Equity ASIAX is going down to Neutral from Silver, though its cheaper share classes still earn a medal. Its 1.43% expense ratio is responsible for the Neutral rating, even though we give it a High for Process and Above Average for People and Average for Parent. So, besides price, the underlying fundamentals are actually pretty appealing. GQG Partners Emerging Markets Equity GQGPX is coming down to Silver from Gold. We rate it High for People and Process and Above Average for Parent. However, fees are a little bit above average at 1.18%. I actually own this fund as I’m a fan of manager Rajiv Jain, but I’d still like to see fees come down a little bit.
4 Key Fund Downgrades
- Invesco Asia Pacific Equity ASIAX
- GQG Partners Emerging Markets Equity GQGPX
- Baron Small Cap BSCFX
- Baron Asset BARAX
Baron Small Cap BSCFX and Baron Asset BARAX are coming down one notch to Bronze from Silver. They charge 1.32% and 1.31%, respectively, which is kind of pricey for their categories, and both get a significant penalty for that. On the plus side, we rate the Process High and People Above Average.
Watch 3 Winners from Our Methodology Changes for more from Russel Kinnel.
The author or authors own shares in one or more securities mentioned in this article. Find out about Morningstar’s editorial policies.
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