Update: Morningstar downgrades H2O fund

Follows Morningstar rating suspension last week

The H2O Allegro fund has had its rating downgraded to 'Neutral', from 'Bronze', Morningstar said on Thursday.

The fund, run by Natixis subsidiary H2O Asset Management, had previously had its rating placed under review by the agency "given concerns on the liquidity and appropriateness of several holdings in the fund's corporate-bond sleeve". On Thursday, Mara Dobrescu, director of fixed income strategies at Morningstar, said the Allegro fund is "run by an experienced team adept at making top-down calls on government bonds and currencies". However, she added: "This team's decision to invest a sleeve of Allegro's portfolio in illiquid, high-risk corporate bonds, all linked to German entrepreneur...