Ratings Roundup

Assirt ratings for BGI, Lazard and Advance

RATINGS houseAssirthas awarded bothLazard Asset Managementand a newBarclays Global Investors’ (BGI) Hedged International Share Fund a four-star rating.

After meeting with Lazard the ratings house stated “the [Lazard] process is well set out and is supported by good systems. The backing of a global parent — using a consistent investment style — is also a plus from both a research and organisational perspective”.

Despite the relatively short time the Lazard Australian shares team has been together, Assirt said it was a group of “highly motivated analysts/ portfolio managers who are complementary in their skill set”.

The Barclays Hedged International Share Fund — a full currency hedged version of Barclays’ existing active international equity product, the Barclays International Funds — International Share Fund — was also awarded a four-star rating.

Last month Assirt named BGI as one of its “highest overall” rated managers on the basis of the performance of the Australian share, Australian equity index, property securities index and international equity index funds — all of which were given the research house’s top five-star rating.

Last week Assirt also rated the various products on offer from Advance Funds Management.

For its overall business, Assirt rated Advance’s business management capabilities as ‘competent’, its operating capabilities as ‘strong’ and asset allocation as ‘weak’.

“In Assirt’s opinion, there is an underlying strategic tension between two views, regarding Advance as a packager versus an in-house manufacturer of investment products, which remains to be resolved. Assirt has some concerns about the level of resourcing in and commitment to sectors that are internally managed.

“However, those concerns are mitigated to some extent by the strong commitment, conveyed to us by senior executives in St George Wealth Management, to add further resources thereby ensuring key programs are delivered effectively,” the ratings house said in a statement.

Macquarie placed on hold

The$55 millionMacquarieSmall Companies Fund has been placed on hold by ratings-houseLonsec— at the time ofMoney Managementgoing to press — following the resignation of small cap portfolio manager Darryl Paul in late March.

“Darryl Paul was the most experienced, so the team is down from three to two… the Macquarie team has only really been together for a year, given Paul’s departure, and one of the issues which prevents a manager from receiving a high rating is the lack of time a team has been together,” says Lonsec investment analyst, Anthony Pesutto.

Macquarie was scheduled to meet with Melbourne-based Lonsec last Friday.

Pesutto says while one of Macquarie’s strengths is its process and the liquidity of stocks held in the portfolio, the team loses a great deal of experience with Paul’s departure.

After nine years with the group and five with the small cap team since the fund’s inception, Paul announced two weeks ago his intention to have a break from the industry and departed last Thursday.

Reporting to head of active equities Peter Mouatt, existing small cap team member, Issam Eid will assume responsibility of the fund.

In February, Lonsec finished its annual review of Australian small caps, rating the Macquarie Small Companies Fund ‘recommended after its first review of the fund.

Morningstar cool on MLC

MLChas been given an Australian equities sector strength rating of three byMorningstar.

“MLC has delivered only moderate, second quartile, returns after fees and taxes, particularly for retail unit trust investors, although somewhat better for retail super fund investors. Given the highly-capable skills and resources within the MLC investment team, and its proven ability to choose capable individual managers, it remains questionable why MLC has not blended these managers more successfully for investors.

“In our view, MLC seems more successful in blending managers that will deliver a style-neutral approach, to reduce downside risk, than in choosing managers that will collectively outperform and so justify MLC charging active fees,” Morningstar said in a release.