Advisers’ favourites fail to find gold: Morningstar
Not one of the 13 alternative investment strategies most actively sold by financial advisers is worthy of a gold rating, ratings house, Morningstar believes.
In its latest alternatives sector wrap, released yesterday, Morningstar revealed that just four of the 13, which account for 30 per cent of the ‘alternative universe ', had been awarded bronze medal status, while the remainder were classified as "neutral".
Morningstar senior analyst manager research, Julian Robertson, revealed that the ratings house had downgraded the Aspect Diversified Futures strategy from bronze to neutral, a move that was attributed to "turnover among key staff".
However, Robertson said that "while we don't have as much confidence in Aspect Diversified Futures 17744 as we once did, we still think it can play a distinct, supporting role in investor portfolio".
He said the performance of managed futures strategies during the global financial crisis seemed to have persuaded many financial advisors and investors that these vehicles provide guaranteed portfolio insurance during market downturns.
"Their performance in subsequent market events shows that this is not necessarily the case," Robertson said.
"Correlations change over time, which means that there are periods when managed futures will be highly positively or negatively correlated to equities. Managed futures should not therefore constitute a portfolio's sole alternatives allocation."
|
Fund Manager/Strategy |
Morningstar recommendation |
|
Acadian Defensive Income |
Neutral |
|
AQR DELTA |
Bronze |
|
AQR Managed Futures |
Bronze |
|
Aspect Diversified Futures |
Neutral |
|
BlackRock Scientific Global Markets |
Bronze |
|
GaveKal Asian Opportunities |
Neutral |
|
Ironbark Global Diversified Alternatives |
Neutral |
|
K2 Asian Absolute Return |
Neutral |
|
K2 Australian Absolute Return |
Neutral |
|
K2 Select International Absolute Return |
Neutral |
|
Neuberger Berman Abs Return Multi Strategy |
Neutral |
|
Winton Global Alpha |
Bronze |
|
Zurich Investments Global Equity Income |
Neutral |
AUTHOR
Nicholas O'Donoghue
Recommended for you
The central bank has released its decision on the official cash rate following its November monetary policy meeting.
ASIC has cancelled the AFSL of a Melbourne-based managed investment scheme operator over a failure to pay industry levies and meet its statutory audit and financial reporting lodgement obligations.
Melbourne advice firm Hewison Private Wealth has marked four decades of service after making its start in 1985 as a “truly independent advice business” in a largely product-led market.
HLB Mann Judd Perth has announced its acquisition of a WA business advisory firm, growing its presence in the region, along with 10 appointments across the firm’s national network.
