Aberdeen has suffered a fresh blow to its active equities business after Morningstar removed the top rating from its flagship emerging market and Asian equity funds.
The ratings agency has downgraded the Aberdeen Emerging Markets Equity and Aberdeen Asia Pacific Equity funds, as well as their offshore equivalents, from a ‘gold’ rating to ‘silver’.
Morningstar said in spite of the downgrade the funds remain “some of the best offerings in this space”.
But it said the funds had suffered from “some recent headwinds in performance” and the Morningstar analysts have “marginally higher conviction in some of the other offerings in the market”.
The Aberdeen Asia Pacific Equity fund, which is managed by a team headed by Hugh Young, is in the bottom quartile for performance in the IA Asia Pacific ex Japan sector in the past three years.
But the fund has generated sector average-beating second quartile performance in one, five and 10 years, while Aberdeen Emerging Markets Equity has delivered top quartile returns in the same time periods.
An Aberdeen Asset Management spokesperson said: “We welcome Morningstar’s comments that they continue to believe the funds are among the best in this space.
“We have been investing in emerging markets since the 1980s, have people on the ground in the regions and have in-depth knowledge of the companies.
“However, we recognise that we face competition but believe the experience and size of our teams, our fundamental bottom-up investment approach and our active engagement with companies mean we well placed to continue to deliver for our clients.”
