BlackRock is the only fund manager to emerge with five-star ratings resulting from research house Standard & Poor’s (S&P) review of multi-sector funds.
In all, four of the seven BlackRock funds reviewed were awarded a five-star rating, three of which were new offerings with one being an upgraded rating.
The standout funds not rated before were the manager’s High Growth Fund Class D, Moderate Balanced Funds Class D and the Conservative Fund Class D. The BlackRock WS Balanced Fund was upgraded from a four-star rating to a five-star rating.
S&P examined 77 investment capabilities in its review, made available by 15 fund managers. Of the 77 capabilities assessed, 26 were awarded either a four or a five-star rating.
In total, 11 capabilities were downgraded while only two were rewarded with an upgrade.
One key finding from the review was that tactical asset allocations (TAAs) implemented by certain managers are now beginning to make a difference. This is in stark contrast to the research house’s review in 2007, when it found TAAs either made no difference or in some instances even diminished the product’s performance.
S&P also found absolute return investment objectives had become more popular and benchmarks commonly being used were the consumer price index or cash plus a nominated percentage.
The popularity of using only internal funds to develop multi-sector strategies was also found to be on the increase, with only 10 per cent of the sample assessed using external manager’s products and 30 per cent using a combination of internal and external offerings.
“S&P’s ratings of multi-sector funds are a function of the underlying asset class ratings of managers, as well as each manager’s asset allocation capabilities,” S&P fund analyst Justine Gorman said.
