BT Funds Management has begun a concerted campaign to win-back adviser confidence in its investment skills, says chief investment officer Gary Symons.
The first step has been getting van Eyk to lift its hold rating, while Morningstar has awarded BT three stars.
Symons says the aim now is to get Assirt to lift its hold rating and van Eyk will be reviewing BT again in a few months time.
“Without being ranked by the researchers, it is very hard to sell product,” he says. “In the US, 70 per cent of money goes to managers with four or five star ratings.”
BT enjoyed a long period of strong inflows from advisers during the nineties, but in recent years it has been hovering near the bottom of the inflow tables.
Symons is quite philosophical about BT’s fall from favour.
“Fund managers have a life cycle of about 10 years and then they need to reinvent themselves,” he says.
“We are starting to get strong again. We have created a good long-term tack record and we are building that trust again with advisers.”
Recent market speculation that BT was going to suspend redemptions due to poor inflows was dismissed by Symons. BT has been doing the opposite, he says, by offering investors the chance to redeem small amounts of their portfolio. The minimum redemption was $1,000 and above, but BT is now allowing redemptions below that figure.
“On our equity products, outflows have been about one per cent which is well below the industry average of between three to six per cent,” he says.
The equites management side of BT has also been beefed up recently with the appointment of Marcus Fanning from AMP.
Fanning has been transforming the Australian equities portfolio. Telcos have gone, they now only count for 0.2 per cent of the portfolio, and have been replaced with more traditional quality blue chips. These have included Fosters, CSL, Macquarie, Suncorp Metway and Aristocrat.
“Buying and selling shares usually is expensive for the fund managers, but we have been lucky,” says Fanning.
“In the last four to six weeks there have been a number of capital raisings in these stocks and we have benefited from these moves.”
The change in portfolio structure has not been without tears. BT has lost $165 million on One.Tel shares, despite having sold 43 million before the crash.
Fanning says the investment process hasn’t changed, BT is still a bottom up manager, just the portfolio construction process has been revamped since his arrival two months ago.
