preference & bond fund marked down from aaa to A in S&P review of high income fund sector
The Henderson Preference & Bond fund has been downgraded from AAA to A in the latest review of the high income fund sector by Standard & Poor's. The research group said the reason for the downgrade was the departure of Ian Dickson, long time manager of the fund.
Dresdner RCM Global Investors saw two of its funds slip from AA to A, despite the management moving to the group's sister manager Pimco, one of the US's largest fixed interest managers.
As well as the downgrades for Dresdner's UK Gilt Fund and UK & European Gilt Yield funds, two of Newton's funds have been put under review with their A ratings suspended.
Both the European High Yield and High Yield Bond funds have been previously managed by Helena Morrissey but were passed to Theresa Egan, and S&P is seeking clarification of whether Morrissey continues to input significantly into the management of the funds.
Investec and Barings also suffered fund demotions, with the Baring Sterling Corporate Bond fund rating lowered one band to A on disappointing performance in 2001. Investec's onshore and offshore versions of its Sterling Bond fund, managed by Michael Markham, were both cut to A from AA following disappointing performance in 2001.
Big winners in the review included Invesco Perpetual which saw its offshore Invesco Sterling Bond Fund lifted one notch to AAA due to the 'consistently successful investment approach' of co-managers Paul Causer and Paul Read.
M&G also scored a success, with Jim Leavis's £207m Gilt & Fixed Interest fund being upgraded from A to AA.
The Aberdeen Fixed Interest unit trust, managed by Paul Reed, was upgraded from A to AA in recognition of its 'consistent and effective investment approach, reflected in continued strong performance within in the Sterling High Yield sector,' the report said.
Gartmore, HSBC and JP Morgan Fleming also saw funds receive upgrades to AA. JPMF's UK High Income fund was upgraded to AA from A in recognition of JPMF's well-resourced team and disciplined investment style.
Gartmore's UK Gilt & Fixed Interest fund was bumped up from A to AA, due to strengthened resources, improving performance and increasing confidence in Gartmore's investment-grade process.
HSBC Investment Funds' Corporate Bond fund moved up one band to AA, reflecting S&P's growing confidence in the contribution of manager Colin Storrar, who took over the fund in April 2001, and the top decile performance achieved in 2001.
Credit Suisse's Corporate Bond Monthly Income fund was upgraded to A from unrated following the appointment of Kevin Adams as named manager. The change round in ratings came during a period in which fixed interest funds again outperformed most equity markets. The period of the review covered the 12 months to May 2002, with emerging debt funds the clear winners within the sector.
A number of well-known funds have been placed under review following fund manager departures. These include the ABN Amro High Income fund, following the departure of former manager George Luckraft.
The rating of the Legg Mason Investors Monthly Income fund has also been suspended, following the departure of Christopher White, who managed the equity portion of this fund.
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