Fixed focus equals success for UBS

fixed-interest/portfolio-management/bt-financial-group/BT/

15 July 2003
| By Lucie Beaman |

UBS Global Asset Management(UBS) led the pack of six star rated funds in the Australian fixed interest sector, coming in ahead ofIOOF/PerennialandBT Financial Group.

The UBS team, led by Stuart Piper, is the best fixed interest team in Australia, according toInvestorWebhead of research Martin Kerr.

Over the three-year period to December 31, 2002, UBS returned 9.39 per cent per annum, only narrowly beating IOOF/Perennial and BT, which both returned 9.21 per cent over the same period.

Piper attributes the group’s success to all-round fixed interest capabilities, on both the interest rate management and credit management sides.

“The reason we can do this competently is because we’ve got a sound process. That process leads to some confidence that we will add value as an active manager,” he says.

“We have an investment process that identifies misvaluation, which we can then exploit to add value, and on the credit side we do all of our own internal credit ratings and appraisals; we don’t just rely on the ratings given by the agencies.”

The process needs to be carried out by a capable and successful team, and Kerr says that UBS has a very experienced and fairly sizeable team of seven people.

“On average, the members on the team have been with UBS for six years, and have an average total industry experience of 11 years,” Kerr says.

“We have specialists in each area, so it’s a good mix of strategy and portfolio management skills from an experienced team,” Piper says.

But the group’s success is not entirely unexpected, “as UBS is an active manager, and active managers have done pretty well this year”, Kerr says

According to Kerr, deciding on who would take out the top ranking position was a difficult process, with InvestorWeb given high praise to IOOF and the BT Financial Group.

The IOOF team headed up by Glenn Feben also has a very experienced and stable team, according to Kerr, with its members averaging 20 years experience in the market and six years with the manager.

He says the group has also recently added a credit expert to the team and plans to introduce more credit specialists into its process.

Kerr says the success of BT Financial Group is largely a result of the input of the Rothschild/Sagitta team, led by Errol Bome.

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