Standard & Poor’s Fund Services has released ratings for funds in the 2012 Australian fixed interest sector review. All ratings remained unchanged except for AMP Capital’s Corporate Bond Fund which was upgraded from four stars to five stars.
The review covered funds offered in four peer groups of cash, enhanced cash, fixed interest, and credit.
There has been very little rating change in this year’s review. AMP Capital’s corporate bond fund was upgraded to five stars reflecting our highest opinion on the investment team, in particular portfolio manager Jeff Brunton, the firm’s investment process, and their approach to risk management. Our other five-star ratings were for the PIMCO Australian Bond Fund and Australian Focus Fund, Tyndall’s Australian Bond Fund, and Colonial First State’s Cash Fund.
Performance across the Australian bond fund universe has been mixed with the key driver of outperformance, or in the majority of cases significant underperformance, being duration positioning.
“The divergent views on the path of interest rates were unparalleled in my time covering this asset class,” said S&P fund analyst David Erdonmez.
“The fact that we had managers presenting views that would lead to maximum long or maximum short duration positioning highlights the different approaches managers take in forming their macro views. The bias of the majority was to the short side with very few managers positioned long,” said Mr Erdonmez.