Investor Takeaways
- Sustainable energy strategies benefit from stable, experienced teams.
- Active equity funds with strong People ratings continue to stand out.
- Passive inflation-linked bond ETFs face structural duration risks.
Several high-profile investment funds have seen rating changes in the latest Morningstar updates, led by an upgrade to the BlackRock Sustainable Energy Fund. The strategy was raised to Silver from Bronze, reflecting increased confidence in its management team and investment process.
The round of changes also included upgrades for JPMorgan and T. Rowe Price equity funds, alongside downgrades to euro inflation-linked bond ETFs from Amundi, iShares, and Vanguard, highlighting growing concerns around duration risk in passive fixed-income strategies.
Latest Fund Upgrades
BlackRock Sustainable Energy Fund - Silver from Bronze
BGF Sustainable Energy benefits from a seasoned and capable management duo. Confidence in the team has strengthened because of team stability, robust research resources, and the mitigation of prior workload concerns. Consequently, the People Pillar rating has been upgraded to Above Average from Average, with many share classes receiving a one-notch upgrade.
Notably, this includes the clean D share classes, which were raised to Silver from Bronze. Lead manager Alastair Bishop joined the strategy as comanager in November 2015 and assumed the lead role in April 2017, bringing deep sustainable-energy expertise developed since 2001. Comanager Charles Lilford joined in March 2018.
Both offer extensive experience in sustainable-energy investing from previous roles. While Bishop retains final decision-making authority, portfolio management is highly collaborative. Support includes two dedicated analysts and access to BlackRock’s well-resourced thematics and sectors group.
Although Bishop remains named on five strategies, his primary focus on sustainable energy has alleviated earlier capacity concerns. The team applies a balanced investment process combining top- down insights with bottom-up stock selection, resulting in a more defensive portfolio relative to peers and supporting an Above Average Process Pillar rating.
JPMorgan US Growth C Acc USD - Silver from Neutral
This strategy benefits from a veteran leader and a solid supporting cast who leverage thorough fundamental research. It earns a People rating upgrade to High from Above Average. Lead manager Giri Devulapally has more than 21 years of experience managing this strategy, which ranks just outside the top decile of large-growth Morningstar Category peers. Devulapally and his team focus on companies with durable competitive advantages, clear opportunities for margin expansion, and sizable addressable markets. The team’s approach couples robust fundamental research with a thoughtful momentum component to find long-term winners while limiting downside risk. Through deep company analysis, the team has identified some of the market’s biggest winners early, and it has held on for the ride while managing position sizes effectively using momentum-driven trading. Devulapally has skillfully built and trimmed positions over the years, focusing on companies with competitive advantages, durable growth, and margin-expansion prospects.
Stephen Welch
T. Rowe Price Global Technology Equity Q EUR 1 -Bronze from Neutral
T. Rowe Price Global Technology’s proven leadership and strong analyst bench merit a People Pillar rating upgrade to Above Average from Average. Manager Dominic Rizzo has made timely moves into artificial intelligence-related investments, making the strategy compelling at the right price point. Rizzo has established himself as a capable and confident leader since taking over this strategy in early 2023.
Drawing on his experience as a former technology analyst, he combines deep industry knowledge with a clear investment framework. Rizzo applies a four-part framework to identify companies that exhibit a combination of mission-critical technologies, share gains in secular growth markets, improving fundamentals, and reasonable valuations.
This approach has reshaped the portfolio toward higher-quality mega-caps and broadened its international exposure, while maintaining flexibility to invest in businesses beyond the traditional technology sector. The process has thrived recently in an environment that is favorable to tech stocks, but its durability in more challenging markets remains untested. Recent results highlight the effectiveness of Rizzo’s approach and execution. Over the course of his tenure, the US mutual fund has comfortably outperformed both its prospectus benchmark, the
MSCI ACWI Information Technology Index, and the typical technology Morningstar Category peer.
Indira Fisher
Latest Fund Downgrades
Amundi Euro Government Inflation-Linked Bond UCITS ETF Acc - Bronze from Silver
We continue to see a low-cost index-based approach to the market of euro inflation-linked government bonds as a compelling investment option. But to strike the right balance between the positives of the strategy as a core long-term holding and the risks to performance over shorter periods, which mainly arise from their inability to modulate duration, we have brought the Process score down to Above
Average from High. For many share classes this has resulted in changes to the Medalist Rating, typically a notch down. However, even after these changes it is important to reiterate the value of these passive options for investors seeking a core building block for their euro-denominated portfolios.
Jose Garcia-Zarate
iShares Euro Inflation-Linked Government Bond UCITS ETF Acc - Bronze from Silver
We continue to see a low-cost index-based approach to the market of euro inflation-linked government bonds as a compelling investment option. But to strike the right balance between the positives of the strategy as a core long-term holding and the risks to performance over shorter periods, which mainly arise from their inability to modulate duration, we have brought the Process score down to Above Average from High. For many share classes this has resulted in changes to the Medalist Rating, typically a notch down. However, even after these changes it is important to reiterate the value of these passive options for investors seeking a core building block for their euro-denominated portfolios.
Jose Garcia-Zarate
Vanguard Eurozone Inflation-Linked Government Bond UCITS ETF Acc - Bronze from Silver
We continue to see a low-cost index-based approach to the market of euro inflation-linked government bonds as a compelling investment option. But to strike the right balance between the positives of the strategy as a core long-term holding and the risks to performance over shorter periods, which mainly arise from their inability to modulate duration, we have brought the Process score down to Above Average from High. For many share classes this has resulted in changes to the Medalist Rating, typically a notch down. However, even after these changes it is important to reiterate the value of these passive options for investors seeking a core building block for their euro-denominated portfolios.
Jose Garcia-Zarate
