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S&P releases ratings for the 2011–2012 Global Fixed Income Sector Review

03 Apr 2012
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Standard & Poor’s Fund Services has released its ratings for the recent Global Fixed Income sector review. The sector covers offerings rated across five peer groups. 

The highest rated funds—all retaining five stars—were PIMCO’s five global strategies, and the Bentham Asset Management Syndicated Loan Fund. There was one newly rated strategy—the Franklin Templeton Global Bond Plus I fund. 

“On the whole, managers had a tough time in the second half of 2011, largely due to short duration and overweight credit calls. These positions hurt performance given the volatility that began to build during this period,” said David Erdonmez, analyst at S&P Fund Services. 

This volatility was a result of a number of key factors which included the lead-up to the sovereign rating downgrade of the U.S., particularly the period surrounding the deliberations on the debt ceiling. Ongoing issues in Europe were also a significant headwind—particularly in regard to the Greek sovereign crisis and the potential for contagion to Spain and Italy. Volatility remained high during the period with a significant flight-to-quality in the government bond sector and subsequent negative movement in spread-related sectors. 

Products in the Global Fixed Income sector are classified into peer groups according to their features. S&P encourages advisers to look at these differences when determining the validity of a strategy for a client’s portfolio.

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