Mixed results for S&P international property review
Standard & Poor’s Fund Services (S&P) has released its ratings on 21 funds in the International Property – Listed sector review. Most ratings have remained stable: 15 have been affirmed, with three downgraded and two upgraded. One fund managed by Advance remains ‘on hold’.
In the review, S&P noted that performance of funds in this sector is still constrained by global economic events, despite signs of improvement.
“We affirmed our five-star ratings, retaining out highest level of conviction in two funds managed by CBRE Clarion Securities (formerly ING Clarion Real Estate Securities) and AMP Capital Brookfield, which remain the standout managers in the rated peer group,” S&P analyst Peter Ward (pictured) said.
Ward said the upgrade of two funds managed by RREEF matched the reviewers’ increased conviction in these funds since the previous ratings review. He cited changes within the global portfolio management team and improvement to the continuity of stock coverage as the reasons for the upgrade.
The three funds downgraded in the ratings review, two managed by Invesco and one by Resolution Capital, dropped from four stars to three stars.
“Our conviction in the Invesco funds’ ability to consistently exceed their performance objective has been tempered somewhat due to the managers’ relatively conservative portfolio positioning,” Ward explained. “This follows a period of underperformance over several years,” he added.
For Resolution Capital, Ward alluded to a number of significant team changes over the past 18 months. “In our view,” he said, “despite our high regard for the senior portfolio managers, the team is unlikely to be at full strength for a period.”
He emphasised that the ratings agency retains conviction that Invesco and Resolution Capital can achieve their respective performance objectives.
S&P will soon publish a sector report, which will include the key findings and sector themes from the review.
Recommended for you
Infrastructure assets are well-positioned to hedge against global uncertainty and can enhance the diversification of traditional portfolios with their evergreen characteristics, an investment chief believes.
Volatility in US markets means currency is becoming a critical decision factor in Australian investors’ ETF selection this year.
Clime Investment Management is overhauling the selection process for its APLs, with managing director Michael Baragwanath describing the threat of a product failure affecting clients as “pure nightmare fuel”.
Global X will expand its ETF range of exchange-traded funds next month with a low-cost Australian equity product as it chases ambitions of becoming a top issuer of ETFs in Australia.
