Standard & Poor’s Fund Services has today upgraded the Macquarie Investment Management-sponsored Premium Asia Fund to four stars and reclassified it as an alternative strategies equity product.
We first rated the fund as three stars in August 2010 when it was part of the international equities peer group.
“Investment manager Value Partners Ltd. invests in Asian ex Japan equity markets, blending classic value-oriented bottom-up stock picking with top-down thematic views to temper (or “hedge”) overall market exposure with index futures and cash positioning. However, it is likely to maintain a long bias making the strategy less absolute return-focused and more appropriately characterised as an “actively managed regional exposure” in our view. With the ability to hold up to 20% cash and to short the market via index futures, the fund may offer downside protection when it makes the right macro calls,” said S&P Fund Services analyst Jason Patton.
The fund’s strengths are its well-resourced and now settled investment team, the recent establishment of a Shanghai office that provides access to mainland China insight and an on-the-ground presence not available to most other equity investment managers, and a promising early track record.
“Countervailing weaknesses in our view are a relative lack of diversity in the decision-making culture, and slightly higher than average fee levels in its new peer context,” said Mr Patton.