Different mortgage fund managers use different tactics to address liquidity issues, and a uniform approach has not been seen yet, according to Standard & Poor’s Fund Services (S&P) analyst Peter Ward.
Ward said S&P considered this to be a reflection of the different underlying investor base, underlying investments, and different managers’ mortgage fund sector outlook.
“Three funds, managed by Australian Unity, Challenger and OnePath have changed their redemption mechanisms. Each solution has provided improved certainty, but outcomes differ,” Ward said.
“The changes have contributed to our decisions to upgrade the Australian Unity fund to three stars from two stars and to resolve the long-standing ‘on-hold’ ratings for Challenger and OnePath funds,” Ward added.
His comments followed the release of S&P Australian Fixed Interest – Mortgages sector review as part of which the researcher rated nine mortgage fund products.
The funds included six conventional mortgage funds, two hybrid funds and one high-yield mortgage fund in the rated peer group.
