Mixed news for diversified funds
IOOF has been upgraded while Colonial First State and ING have both been downgraded as part of research house Lonsec’s Diversified Sector Review released two weeks ago.
The re-ratings were the only changes to the review, which consists of 11 single managers across the diversified range, and includes capital stable, balanced, growth and high growth options.
IOOF joins UBS GlobalAsset Management as the only managers to be given a ‘Highly Recommended’ rating, while Colonial’s conservative, balanced and diversified funds were downgraded from ‘Highly Recommended’ to ‘Recommended’, and ING had its capital stable, balanced and managed growth trusts downgraded to ‘Investment Grade’.
Lonsec says IOOF, which outsources management of its diversified funds to Perennial Investments, has consistent capabilities across the sectors in which it has a presence, namely value styled investment, fixed interest and global equities, resulting in its capital stable and balanced funds rising to ‘Highly Recommended’.
As for Colonial, Lonsec believes some aspects of its competitive advantage have been eroded by instability within global equities, senior departures across the investment team over the past few years, as well as increasing capacity issues within domestic equities.
Meanwhile, the research group says ING has reasonable but not outstanding capabilities across asset classes and more recently, continued staff turnover of the Australian equity team has become a concern for the diversified funds.
AUTHOR
Craig Phillips
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