Standard & Poor’s Fund Services today released its ratings on its Listed Infrastructure sector, affirming ratings on nine funds, upgrading one, assigning two new ratings, and withdrawing its rating on one fund.
There is one new manager, Magellan, which was rated in 2008 but withdrew in 2009. Magellan offers a relatively concentrated global infrastructure product, which was assigned a three-star rating—the same rating it had when last rated. The other new rating is an unhedged version of RARE’s Infrastructure Value fund.
“We upgraded one fund—the Macquarie International Infrastructure Securities Fund—to four stars from three stars due to our increased conviction in the team. It is one of the largest teams in the peer group and the team has access to broader resources within Macquarie for ideas and opportunities, which we consider a strength. The manager has also simplified the fund’s fee structure and with a relatively low management fee, the product is very competitively priced,” said S&P Fund Services analyst Simone Gavin.
The sector’s relative immaturity, given the long-term nature of investments and limited track records, has led us to be somewhat cautious in upgrading ratings. Most funds in the peer group are rated three stars and there are currently no five-star rated products. The capabilities that we rate as four stars are Vanguard for its customised index approach, RARE for its global listed infrastructure fund, and the recently upgraded manager Macquarie. Macquarie and RARE have the largest teams in our peer group which we believe allows greater depth and breadth in coverage.
Ms Gavin added: “We will continue to gain conviction over time as managers show they can meet objectives over the market cycle while consistently investing to their style.”
The 2011 sector review is our fourth formal review of listed infrastructure and covers 12 listed-infrastructure capabilities and eight managers. It includes 10 global capabilities, one emerging markets infrastructure product, and one domestic fund. We will publish a sector report in due course, including the key findings and sector themes from our review.