S&P Fund Services Assigns Three Stars To Hunter Hall Value Growth Trust

Standard & Poor’s Fund Services assigned its three-star rating to the Hunter Hall Value Growth Trust, based on the manager Hunter Hall Investment Management’s continuing stable management, enhanced investment process, and team experience. We now rate the Hunter Hall Value Growth Trust as part of our International Equities – Small Cap sector. It was previously part of the Multi-Sector – Equity sector due to the strategy’s large bias to Australian equities.

 We are pleased to see stability return to the team at Hunter Hall after internally led changes resulted in the departures of four portfolio managers in late 2008 and early 2009. We see clear positive aspects in the current portfolio manager structure which pairs senior portfolio managers with more junior colleagues. “This more collegial approach to stock-picking encourages debate without compromising accountability and the manager’s performance-driven culture,” said S&P Fund Services analyst Justine Gorman.

The investment process continues to be refined with the introduction of additional portfolio risk constraints and improved portfolio-construction discipline. The manager’s value, bottom-up, benchmark-unaware style, gives the fund a relatively wide mandate, allowing large biases to specific securities, countries, sectors, or market capitalisations, which may deliver a different risk/return profile to the benchmark and peer funds.

This fund is currently meeting its objective and has a long, successful track record, even when measured against international small-cap benchmarks. “The fund’s ability to hold cash up to 30%, as well as to employ active currency management, gives it a level of flexibility that peers do not have,” said Ms. Gorman. Due to the active hedging policy, fund return volatility may be higher than a similar unhedged investment.