Standard & Poor’s Fund Services has released its report outlining the key findings and themes from the 2012 review of the fixed interest peer group.
The report covers a diverse number of products classified into Australian and global offerings and further by individual peer groups. These include “plain vanilla” bond funds that fall within the “fixed interest” classes and funds that differ in their make-up and therefore have a specific classification such as “credit” offerings including “high yield”.
“For the past three years, our commentary on this asset class has incorporated discussions around the issues in peripheral European countries, and this year is no different. Performance in 2009 and 2010 was generally strong, but 2011 and the first half of 2012 proved to be a difficult time for active managers,” said S&P fund analyst David Erdonmez.
Performance for our more core offerings has largely been dictated by duration and the ability to predict the future path of interest rates. Meanwhile, credit-focused offerings have been susceptible to widening spreads in a risk-off environment.
Key points from the report are:
- Bentham Asset Management and PIMCO are the only managers to receive our highest ratings in the global fixed interest sector with both managers retaining five-star ratings on their offerings.
- Tyndall Investment Management, PIMCO, Colonial First State Global Asset Management, and AMP Capital Investors received five-star ratings for their Australian fixed interest offerings.
- Two funds in our global fixed interest peer group currently remain ‘On Hold’. These are the OnePath Wholesale Diversified High Yield Trust, and the OnePath Wholesale Diversified Fixed Interest Trust.
- Turnover within investment teams was reasonable during this review cycle with the only notable change being team additions at UBS Asset Management. Former INGIM staff members Rachel O’Connor, and credit analyst Thomas Wu have permanently joined the team.
9 July 2012