Funds analyst Morningstar has followed through on its blistering censure of H2O Asset Management with an official downgrade of one of its flagship funds, which slumped by more than 50% during March.

H2O, a subsidiary of French bank Natixis that manages €31.4bn, apologised to investors on 17 March for the “particularly significant” losses during the prior week, blaming a failure of its hedging strategies in markets that had not been so volatile since the financial crisis.