Three funds added and three removed in latest FE Investments’ Approved List

Find out which funds have been added and which have been removed in FE Investments' latest Approved List rebalance

12 May 2020

Funds from the Global Emerging Markets, UK Equity Income and Unclassified sectors have been added to the latest Approved List issued by FE Investments, while the Global, Global Equity Income and Targeted Absolute Return sectors saw some of their funds removed.

BlackRock Emerging Markets, Unicorn UK Ethical Income and AB US Concentrated Equity were all added to the list. Merian Global Equity Absolute Return, Artemis Global Income and Invesco Global Focus meanwhile were dropped following the latest biannual review.

Commenting on the changes, Charles Younes, Research Manager at FE Investments, said:

On the buy-side, we chose BlackRock Emerging Markets, for its high-turnover approach to investing in emerging markets. Since manager Gordon Fraser took over the strategy in 2017, the fund has produced consistent top quartile performance. Unicorn UK Ethical Income meanwhile has been a solid performer in our portfolios. It employs the same strategy as the Unicorn UK Income fund, but has hired dedicated staff to work on the environmental, social and governance (ESG) side.

From the Unclassified sector, we have chosen AB US Concentrated Equity. The fund takes a very concentrated approach to investing in large-sized companies in the US. The fund focuses on quality, seasoned businesses with clear competitive advantages and James T. Tierney has managed the strategy since 2013 – delivering consistent top quartile performance.

The latest Approved List also highlighted the challenging conditions investors have faced in the early months of 2020 and how they have impacted on certain funds.

Charles Younes, Research Manager at FE Investments, added:

We decided to remove Invesco Global Focus. This fund was previously known as the Invesco Global Opportunities fund up until the end of February this year when it was renamed following the takeover by Randall Dishmon. The re-shuffle of managers at Invesco will likely lead to a change in style and our reasons for investing in the fund are no longer supported.

Alongside this, we have been disappointed with the performance of both the Artemis Global Income and Merian Global Equity Absolute Return funds. While the value style of the Artemis fund is out of favour, it has not been helped by some poor stock picking which has delivered periods of consistent underperformance. Merian Global Equity Absolute Return meanwhile has, we believe, lost an unacceptable amount for a fund that is aiming to target absolute returns in all market conditions. While the managers have made several changes recently, it is too early to say whether they will be successful.”