Morningstar has downgraded the £5.1bn Newton Global Income fund to a rating of neutral following the departure of fund manager James Harries, who joined Troy Asset Management at the start of the year.
Nick Clay, who had been an alternate manager for the fund since August 2012, is now the lead manager of the fund, which had previously held a silver rating.
“To our knowledge Harries was the primary driver of the strategy, while Clay acted more as a representative of the funds to clients. Therefore, we would like to see how Clay fares as lead manager without the guidance of Harries,” says senior manager research analyst at Morningstar Jeffrey Schumacher.
Terry Coles has become the new alternate manager, while Ian Clark is an analyst on the fund.
“As the current team has only been in place since the start of 2016, we have no meaningful track record on the quality of execution of the strategy. The fund is therefore assigned a Neutral rating, reflecting our lower levels of conviction,” Schumacher says.
The fund has seen £182m in net outflows since Harries announced his departure in December last year, according to Morningstar estimates. The fund saw £277.85m of net outflows between December and the end of May, before seeing £95.8m of net inflows in June.
The announcement of Harries departure came six months after Newton Asian Income fund manager Jason Pidcock left the firm to join Jupiter. Morningstar downgraded the £4.4bn fund from silver to neutral after his departure.