Global equity shaken by shift in currency status quo
In what has represented tough times for large cap global equity funds, ratings house Lonsec has upgraded four funds and downgraded one in its latest Large Cap Global Equity Sector Review.
The review provided to Money Management revealed the only fund to be downgraded in the process was the UBS International Share Fund, which was downgraded from ‘recommended’ to ‘fund watch’ on the back of its January announcement that much of its decision-making would occur in UBS’s London office.
Lonsec said it required further evidence of the impact of the changes before an upgrade could be considered.
The four funds to be upgraded were the Acadian Global Equity Fund to ‘highly recommended’ from ‘recommended’, the Advance International Sharemarket Fund from ‘fund watch’ to ‘investment grade’, the CFS Global Share Fund from ‘fund watch’ to ‘investment grade’ and the Invesco — Global Matric Fund from ‘fund watch’ to ‘investment grade’.
Seven funds were awarded ‘highly recommended’ status: Acadian Global Equity Fund, AXA NMFM Global Equity Value Fund, Barclays International Share Fund, Templeton Global Equities Fund, T. Rowe Price Global Equity Fund, Walter Scott Global Equity Fund and Zurich International Share Fund.
According to the Lonsec analysis accompanying the sector review, the strength of the Australian dollar and the weakness in the US dollar have had a significant impact on the end return to investors.
It said that of the funds reviewed by Lonsec, there were 10 that offered the same underlying product in both a hedged and an unhedged version.
“The average outperformance of the hedged version of the fund over the unhedged version was a considerable 7.2 per cent,” the analysis said.
The analysis also noted which manager styles had worked best, with the majority of funds that had performed well falling into the ‘growth’ and ‘thematic’ style categories.
It said this represented a change over last year’s review, where ‘value’ managers had experienced a more favourable market environment for the bulk of the period since 2000.
AUTHOR
Mike Taylor
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