S&P extends long/short 'on hold' ratings
The Australian Securities and Investments Commission’s decision to extend its ban on covered short selling by another 29 days has prompted major ratings house Standard & Poor’s (S&P) to extend its ‘on hold’ rating on 13 Australian equity long/short funds.
S&P Fund Services analyst Simon Scott said given the continued inability of Australian equity long/short managers to perform to the full extent of their mandates, the ratings house had decided to maintain its ‘on hold’ rating across the peer group.
He said S&P still expected the funds to be able to operate and function as long-only products, but their flexibility had been severely reduced by the extension of the ban. Scott said that in addition to the seven Australian equity long/short funds remaining ‘on hold’, a further six international equity long/short funds with a quantitative focus remained ‘on hold’.
“S&P is still receiving information from these managers to ascertain the impact of the global ban and to build our conviction that these funds can continue to meet their objectives over their stated time periods,” he said.
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