recently launched Strategic bond fund run by Ted Bacon receives S&P (new) accolade
Threadneedle's recently launched Strategic Bond fund has received an AA (new) rating from Standard & Poor's, reflecting its belief that the credit team running it is one of the best in the City.
New Star's UK Growth fund, managed by Alan Miller, has been given an A (new) rating, as has the First State Health and Biotechnology fund managed by Joe Anderson.
The (new) affix to the Standard & Poor's rating indicates that a fund, though newly launched, has a tried management team. A (new) rated fund is then monitored closely for a year when it has the chance to earn a full rating.
Of the Threadneedle Strategic Bond fund, which was launched on 5 November and is managed by Ted Bacon, manager of the AAA-rated Threadneedle Corporate Bond fund, S&P said: 'The fund will be managed by an experienced and highly capable team of four, including Bacon and Barrie Whitman, both longstanding bond fund managers of recognised ability.'
James Tew, European head of research at S&P, said it was the strength of this team that warranted the AA (new) rating. Whitman, he noted, already manages two AA-rated high yield bond funds.
But in Tew's eyes, questions remained about the fund, which invests in a combination of high yield and investment grade debt.
He said: 'The test for the fund will be to demonstrate over the medium term the combination of lower risk and higher return identified by its quantitative research.
'The structure of the fund has been determined after extensive research and although the theoretical approach is well founded and is clearly supported by research studies, the effectiveness of the approach in practice in the UK and European markets remains to be tested. Because of this, Threadneedle has committed considerable time and resources to explaining all aspects of the fund's rationale and structure to potential investors.'
Miller's New Star UK Growth fund was only launched in July, but the manager's track record at Jupiter, his previous employer, justified the A (new) rating.
Tew said: 'Miller built his reputation at Jupiter Asset Management, under John Duffield, where he managed the Jupiter UK Special Situations Fund. He employs broadly the same investment style as he did at Jupiter: a stock picking approach to portfolio construction with a tendency towards value.'
He said that Miller fitted in well with Duffield's approach of building up star fund managers. Tew said: 'Duffield has a clearly defined approach to investment management and, in an environment where many groups are moving towards having large teams and a consensual approach to investment, he continues to favour the cult of the individual.'
Standard & Poor's also praised First State's Joe Anderson. However, Tew believes that Anderson has yet to prove himself as a fund manager over the longer term. Tew said: 'Anderson brings 15 years of strong academic and industry experience to this fund, including time as a Government special adviser. His sound grasp of investment markets is grounded in time spent as a sell side analyst. He has, however, only managed money for 18 months. Anderson's considerable knowledge of his field and stocks within this sector and his extensive research experience result in the fund achieving an A (new) rated status.'
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