Four alternative strategies retain 5 star rating - S&P
CFS Wholesale Equity Income, K2 Australian Absolute Return, Platinum International and Platinum Asia have all maintained a 5 star rating in Standard & Poor's latest report on the alternative strategies equity sector.
S&P rated 38 strategies in total, upgrading three, downgrading one, affirming the ratings of 29 and assigning five brand new rankings.
The ratings for alternative strategies were divided into three peer groups - Beta Variable, Market Exposure and Market Neutral.
S&P Fund Services analyst Michael Armitage said the variable beta peer group continued to show its strengths in cushioning investors, particularly on the downside.
"We noted a majority of managers in that group rotating net exposures to relatively low levels in recent periods as a reflection of their forward assessment of sideways and uncertain markets, at a time where returns to cash were also relatively attractive," Armitage said.
Armitage went on to say that regular improvement of risk management staffing, protocols, and systems at certain firms has raised the bar for the sector as a whole.
"We have noted a number of managers making what we would consider positive changes to product features, such as around prime brokerage and custody arrangements, valuation protocols for hard-to-price securities, or performance fee calculations," he said.
The report determined that Aviva Investors and K2 Select International Absolute Return be upgraded from 3 to 4 stars, while Pengana Global Resources went from 2 to 3 stars.
Rated for the first time, four CFS FC funds and Merricks Capital Equity Fund were awarded 4 stars.
Meanwhile, Lodestar Australian Strategic Share Fund - the only fund to be downgraded as part of S&P's alternative strategies equity review - dropped from 4 to 3 stars.
Recommended for you
With wealth management M&A appetite only growing stronger, Business Health has outlined the major considerations for buyers and sellers to prevent unintended misalignment between the parties.
Industry body SIAA has said the falling number of financial advisers in Australia is a key issue impacting the attractiveness and investor participation of both public and private markets.
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
