Strong performances in S&P diversified fixed interest review

Standard & Poor’s Fund Services (S&P) has released its International Fixed Interest — Diversified Fixed Interest sector review, with PIMCO’s Diversified Fixed Interest Fund the only maximum five-star rating in what was a strong field overall.

Legg Mason’s Global Multi Sector Bond Trust was the only upgrade, moving to four stars, while the only downgrades were from the UBS Diversified Fixed Income fund and a CFS FirstChoice fund, which dropped to three and two stars respectively.

Overall eight managers were rated four stars, six managers were rated three stars and one fund was rated two stars.

“The high number of funds rated four stars and above reflects the strength of the peer group, which can be characterised by large global investment teams, well-established processes, and market leading systems,” said S&P analyst Anthony Karaminas.

The review highlighted the benefits of accessing certain specialist sectors, while there was also a bias towards the domestic market, he said.

“A larger allocation to high yield, emerging markets, ABS, and the bank loans sector has been a theme in the past 12 months, with established managers using internal specialist teams to gain an advantage,” he said.

Most managers outperformed their benchmark in the past 12 months, which was to be expected in the current environment, he said.