NEWS UPDATE: 'Sell' rating on UBS Equity Income Fund

Standard & Poor’s (S&P) Fund Services has placed a ‘sell’ rating on the UBS Australian Equity Income Fund following notification from UBS Global Asset Management that fund manager Paul Stanley will relinquish his position.

As a result, S&P believes significant issues exist that may adversely effect the fund’s performance and, therefore, existing investors should consider obtaining advice on switching or redeeming funds.

“Given its slow growth in assets over its three-year life and the loss of Mr Stanley’s experience, S&P has concerns about the manager’s commitment to the strategy,” S&P analyst Justine Gorman said.

Stanley is responsible for the portfolio’s implementation, based on regular model portfolio recommendations from UBS’s quant business in the United States, DSI.

“Although not considered by S&P to be a sustainable source of income, we note that a significant component of the fund’s income over the 12 months to April 2008 was generated from participation in share buybacks.”

Participation in share buybacks has since diminished as economic conditions have changed.

Following Stanley’s departure, Piers Bolger and David Anderson will assume the role on a co-portfolio manager basis.

Based in Melbourne, Bolger and Anderson are currently responsible for the development of the UBS GAM business and building relationships with the research houses and asset-consulting community.