International fixed-interest funds have performed strongly and have generally been able to successfully navigate volatile global market conditions, according to the latest sector report from Standard & Poor’s Fund Services (S&P).
The international fixed-interest sector report covered 44 capabilities offered by 22 managers and consistency in ratings was one of the key outcomes of the review, with 34 fund ratings affirmed, one upgraded and three downgraded.
Legg Mason’s Global Multi Sector Bond Trust was the only fund to be upgraded in this year’s review, moving from three to four stars, while Bentham Asset Management and Pimco were the only managers to receive S&P’s highest ratings, with each retaining five stars.
S&P said five-star rated managers differentiated themselves through the quality and experience of their investment personnel and the overall depth of their investment teams.
“They have well-designed investment processes which can add value consistently, an appropriate emphasis on risk management, a remuneration structure which aligns the interests of the investment team with those of the investor, and appropriate investment objectives and fees,” the group said.
The three funds that were downgraded included: the UBS Diversified Fixed Income Fund, which went from four to three stars; the CFS First Choice Wholesale Investments – Macquarie Income Opportunities Fund, which went from four to three stars; and the CFS First Choice Wholesale Fixed Interest Fund, which went from three to two stars.
In the meantime, S&P resolved “on hold” ratings on a number of funds during the course of the review. These included: two Aberdeen Asset Management offerings, the Global Government Bond Fund and the Diversified Fixed Income Fund; the Amundi Global Diversified Fixed Interest Fund; and the Aviva Investors Professional Premier Fixed Income Fund.
S&P said in its review that cash holdings had also reduced over the year as managers had a higher degree of confidence in the liquidity of portfolio positions and client flows.
