Four top-rated funds drop to lowest Crown rating

crowns BMO Bantham Legg Mason PIMCO AREITs reece birtles Will Baylis

4 September 2020
| By Chris Dastoor |
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There are four funds that have gone from 5 Crowns to just 1 in the latest rebalance of the FE fundinfo Crown ratings. 

BMO LGM Global Emerging MarketsBentham High YieldLegg Mason Martin Currie Real Incom and PIMCO Capital Securities Wholesale all saw the significant drop-off. 

Two of the funds – Bentham’s and PIMCO’s – sat in the diversified credit sector, while the BMO fund sat in the emerging markets equity sector. 

The Legg Mason fund was an Australian equity fund, but it sought to provide a growing income stream by investing diversified assets such as Australian real estate investment trusts (AREITs), utilities and infrastructure. 

Its strategy was built around listed real assets sustaining dividends, matching the cost of living and being less volatile than the broader equity market and was subsequently hit hard by the reduction of dividends due to the COVID-19 pandemic. 

Martin Currie chief investment officer, Reece Birtles, and portfolio manager, Will Baylis, had previously written to Australian Securities Exchange (ASX) companies reminding them of the “power of dividends” for retirees. 

“In such difficult economic times, and with an uncertain market outlook, the benefits of both dollar income and franking credits to retirees cannot be underestimated,” they said. 

“Retirees are key beneficiaries of these dividends, and they have worked hard to have sufficient capital to fund their own retirement.” 

However, the Real Income fund had noted that it was well-positioned to meet the challenges currently faced in the market. 

“During the COVID-19 related broad market sell-off in March, real assets saw unprecedented GFC-like [Global Financial Crisis] market falls and were, unusually, one of the weakest sectors,” the fund said. 

“However, given that real assets are used every day – even in a recession – and form the tangible building blocks of society, they are the first companies to benefit as State and Federal Governments ease restrictions.” 

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