BT scores rating upgrade
Ratings houseAssirthas upgradedBT Funds Management(BTFM) diversified product rating from hold to investment grade, or a three star rating, announcing the upgrade after an extensive review of the fund manager.
Assirt also rerated the group’s capabilities in Australian and international equities boosting the ratings for Australian equities from weak to competent, that is two to three stars. International equities on the other hand were downgraded to weak, dropping from three to two stars.
Assirt analyst Jody Fitzgerald says the reason for the overall upgrade was due to major structural changes in the management and investment teams structure. This was combined with a tightening of portfolio construction and closer alignment with risk management processes.
“One of the key issues was the change in staff as headed up by the new chief investment officer Gary Symons. This has lead to a strategic review and a departure away from a star culture to a team culture,” Fitzgerald says.
“This meant that not all analysts recommendations went into portfolio construction but now there is a greater level of team debate. Most of the stars are gone and those who do not appreciate the new culture will probably go as well.”
The upgrade in Australian equities came out of this restructure, according to Fitzgerald, but the downgrade in international equities was due to concerns with the ability to produce competitive returns.
“For some time BT was one of a few international managers operating in the local market but there are other players now as well. There are some strengths such as the European and US portfolios which are rated at three stars but when added to the overall internation picture this does not carry through,” Fitzgerald says.
“However BT needs only to make changes at the margin to rebalance this area and become positive going forward.”
Assirt chief executive Krystyna Weston says BTFM also benefitted from a number of other factors such as strong customer service capabilities and market presence which would assist any turnaround in market perceptions of the group.
However she stressed that this was still dependent on performance in coming months.
Also receiving positive ratings were the Australian fixed interest, listed property and cash which were considered strong, while international fixed interest, asset allocation and currency were considered competent.
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