Ratings House Morningstar has given a qualified endorsement to the decision by AMP to extend the redemption arrangements on the AMP Enhanced Yield Fund describing it as “sensible” but “a last resort move”.
The fund has been downgraded by Morningstar to ‘investment grade’.
AMP changed the redemption arrangements on the Enhanced Yield Fund last Friday with withdrawal requests extended beyond the original 10 to 12 days to up to 12 months. Morningstar noted that the change had followed the manager noting higher than usual withdrawal requests that had not been matched by incoming investments.
“This is a last resort move, but a sensible one, showing commitment to looking after remaining investors,” the Morningstar analysis said.
The ratings house paid tribute to the depth of knowledge of the specialist investment teams running the fund, but said that given the restricted liquidity it could no longer recommend the strategy alongside other preferred multi-strategy income options and had therefore downgraded the product to ‘investment grade’.
