SchrodersandBarclays Global Investorshave been awarded the top ‘AA’ rating inVan Eyk Research’s 2003 Australian equities sector report.
ABN Amro,State Street Global AdvisorsandInvestors Mutualwere all upgraded from a ‘B’ rating, denoting an ‘average’ manager, to an ‘A’ recommended rating in the review, released today.
Only one manager, Tyndall, was placed on ‘hold’ as a result of the review. The research house says this was due to the recent announcement by its parent company of its intention to sell the group.
The review covered 44 Australian equity managers, and for the first time included a number of boutique managers, which had previously been assessed separately.
Following a year where value managers have dominated, the review indicated the outlook for 2003 will favour “a slight tilt to growth with a neutral cap bias”.
“The trade-off between risk and return is likely to be lower in 2003, so this should favour qualitative/disciplined processes, which systematically search for returns and take account of transaction costs,” Van Eyk analyst Nigel Douglas says.
With returns in the Australian equities sector for the year to September 2002 ranging widely from 32.5 per cent to negative 9 per cent, Douglas says it is important for investors and advisers to understand which style category managers fall into, and the implications for performance given the market outlook.
The Van Eyk review also noted significant dispersion in the returns of GARP (growth-at-a-reasonable-price) managers, due to variation in value and growth biases within this style category.
The research house will conduct further research on the usefulness of this style of manager in the coming months.
Van Eyk will also release a review of long-short Australian equity funds later this year.
