By Jenne Mannion The Schroder Tokyo unit trust has had its Standard & Poor's Fund Services rating re...
By Jenne Mannion
The Schroder Tokyo unit trust has had its Standard & Poor's Fund Services rating reduced one band to frAA, while the GAM Japan Growth Fund's rating also fell one band, to frA.
S&P said the Schroders unit trust run by Dennis Clough has underperformed the peer group over the past 12 months, due to the manager's value orientation which has not been suitable in the momentum-driven market conditions. This marks the second successive year of underperformance, bringing the fund's overall three-year ranking into the third quartile in its Autif sector.
The GAM Japan Growth Fund has also underperformed the peer group for the second successive year since its launch as Paul Kirby's management style has resulted in low exposure in the strongly-performing tech, media and telecoms sectors over the past year.
While S&P said it continues to have a high opinion of the manager, this relative underperformance has caused the fund's rating to fall to frA. The Fidelity Japan Oeic and Save & Prosper Japan Growth unit trust were both upgraded one band to frAAA.
Fidelity received a new ranking on the back of fund manager Jay Talbot's maintaining the portfolio's strong track record since he took over the management in July 1998 it also outpaced its offshore counterpart Fidelity Funds Japan over the period.
The Save & Prosper Japan Growth Fund generated strong performance under the management of Richard Whittall. Since he took charge in October 1998, the fund has outperformed the peer group by more than 250%. The increased rating came on the back of the manager's track record, his style and the strength of the group's Japan team, according to S&P.
Unit trusts and Oeics making their debut with frAA ratings include Capel Cure Sharp Japanese Growth, Fleming Select Japanese, LeggMason New Japan, and the Sun Life of Canada Japan Funds.
In the Japanese Smaller Companies sector, INVESCO GT Japanese Smaller Companies fund received a frAAA-rated status. S&P said this fund's outstanding performance record of top quartile in four of the past five years and first cumulatively is testimony to the stockpicking prowess of manager Masato Kawada.
The S&P survey of the Japan sector found that fund managers who are located in the region have had a significant advantage over those not based in the Far East, with the average locally-based fund outperforming its UK managed counterparts by 60% over one year. This can be attributed to the importance of stock selection, particularly in new Japan companies, over the past year, according to S&P.
S&P also found that fund managers who followed aggressive strategies, based on concentrated portfolios and backed by strong stock selection in new economy stocks have achieved the best performance over the past three years.
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