van Eyk hands down AA rating to two Australian equities funds
van Eyk has awarded the Fidelity Australian Equities Fund and the Goldman Sachs Australian Equities Wholesale Fund an AA rating in Australian equities, the first AA rating since 2009.
In its 'Australian Equities Review 2012', van Eyk considered the approach of 46 strategies, awarding 14 A ratings, 15 BB ratings and 10 B ratings. Along with two AA ratings, five strategies were either screened or refused review, van Eyk stated.
van Eyk head of ratings Matt Olsen said that both the Fidelity and Goldman Sachs funds were superior to the other strategies under review due to the skill of the investment teams and the research resources available to them.
According to the review, the AA rating meant van Eyk had "high confidence" the managers would outperform the benchmark over a three year period.
"We believe that managers who are willing to go that extra mile will have the edge on their competitors," Olsen said.
The better rated managers had the will and ability to look for unique insights into stocks and industries by regularly visiting companies, customers and suppliers in person. Managers who had the ability to choose superior companies within sectors were also at an advantage, the report stated.
Macroeconomic conditions will be particularly important to the performance of Australian equity strategies in the next two to three years, according to van Eyk.
In relation to the sector results, Olsen said the better managers could back up their assumptions on underlying forecasts and valuations with detailed and proprietary fundamental research at both the stock and industry level.
The report also stated that van Eyk's long-term strategic recommendation is for a balanced fund to have a 28 per cent weighting to Australian equities.
Recommended for you
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
Australian investors are more confident than their APAC peers in reaching their financial goals and are targeting annual gains of more than 10 per cent, according to Fidelity International.
Zenith Investment Partners has lost its head of portfolio solutions Steven Tang after 17 years with the firm, the latest in a series of senior exits from the research house.
