BlackRock on top in S&P multi-sector ratings

Standard & Poor’s has released the ratings of funds in its multi-sector review, including 77 capabilities from 15 different fund managers across the wholesale and retail markets.

More than 460 funds were covered, with the capabilities divided into seven peer groups. The review included 12 new capabilities, while five previous capabilities were withdrawn.

“S&P’s ratings of multi-sector funds are a function of the underlying asset-class ratings of managers, as well as each manager’s asset allocation capabilities,” S&P fund analyst Justine Gorman said.

S&P examined factors such as the funds management team and their investment philosophy, asset allocation, risk management and investment constraints.

BlackRock was the only fund manager to be awarded a five-star rating, which it achieved in four capabilities, S&P noted.

In contrast to the 2007 review, an increasing number of fund managers demonstrated that they could add value through tactical asset allocation, while the financial crisis limited the effect of diversification, S&P said.

Fund managers were increasingly moving towards absolute return investment objectives, aiming to match or outperform consumer price index and cash returns, and many were using only internally managed funds to construct multi-sector strategies, S&P said.