Assirt gives Tower mixed review

AssirtratesTower’sbusiness management as competent while rating its operating capability as strong in its review of the funds manager.

Tower has experienced a drop in performance, says Assirt, which has led the research house to downgrade the rating of its Australian equity funds to three stars, or “investment grade”.

But within the ratings of Tower’s capabilities in different classes, its Australian equities capabilities is rated as strong, as is asset allocation, while its ability to manage the cash class is ticked as very strong.

Australian fixed interest and property securities were both rated as competent, while the competent rating was also applied to Tower’s international fixed interest capabilities, which were managed by appointed manager Pimco.

International equities has been upgraded to competent after Tower changed its passive currency hedging policy, which “allows its managers a regional overlay and active currency to add value without the impediment of a ‘strategic hedge’ ”.

Tower’s property class is rated as weak because its portfolio is relatively small and dominated by a single property, according to Assirt.

“As a growth manager, Tower has suffered in the current swing toward value stocks as investors have adopted a shorter duration stance to equity market return expectations and have exploited the valuation gap between growth and value equities…It is pleasing to see that Tower’s international equity performance issues have been addressed,” Assirt investment analyst Mike Webb says.