More ratings gloom for BT

InvestorWeb has delivered a scathing assessment of BT Funds Management’s international equities capabilities, downgrading the rating of all BT international funds in its latest assessment of the beleaguered fund manager.

The ratings agency dropped BT’s American Growth, International and TIME funds from hold to sell, and the group’s European Growth and Pacific Basin funds from buy to hold, after concluding that BT’s international equities reporting structures had become disjointed and lacked “logical structure” following the appointment of Paul Durham to head of international equities.

The InvestorWeb report, whilst describing Durham’s appointment as sound in BT’s efforts to remove operational responsibility from individual portfolio managers, found it was prompted by a cynical attempt to inject much needed market confidence into BT, and had in fact created an “overly bureaucratic team structure”.

Under BT’s new team structure, all international portfolio managers report through to Durham, but it is Marcus Fanning, as portfolio manager and head of Australian Equities, who reports in isolation to BT chief investment officer Gary Symons.

“InvestorWeb believes the appointment [of Durham] was done to sure [sic] up the market with a known BT face,” a statement released by the ratings agency says.

The InvestorWeb review has also questioned the continuing involvement of Chris Selth with BT’s international equity division. Selth was replaced by Durham as head of international equities in July, but has continued his involvement with the group as a consultant according to the research group.

The ratings house was much more up beat about BT’s Australian equities capabilities, upgrading the manager’s Australian share funds from a sell to a hold after applauding changes made to the fund’s performance objectives, portfolio construction and stock valuation processes under new head of Australian equities Marcus Fanning.

The Australian equities ratings boost follows a similar assessment by Assirt last week, which upgraded BT from three stars to two after an extensive review.

“We believe the changes Marcus Fanning has already made to portfolio construction, team personnel and dynamics and stock selection processes are extremely positive,” InvestorWeb says.