S&P Capital IQ said it had re-classified several hundred asset allocation funds because “other peer-group providers had failed to take full account of exposure to non-equity risk assets”.
The new methodology factors in a broad range of risk assets such as commodities, sub-investment grade fixed income and property and enables investors to compare asset allocation funds globally, the firm said.
A big difference has been at the cautious/defensive end of the range, which has led to the division of S&P Capital IQ’s sterling cautious sector into two groups – defensive and neutral.
Randal Goldsmith, fund analyst and asset allocation sector head at the firm, said that as a result, most distribution funds ended up in the neutral rather than defensive peer group. For example, Invesco Perpetual Distribution Fund, Legal & General Multi Manager Income and Standard Life Dynamic Distribution Fund were each transferred from the cautious managed peer group to neutral, while the BlackRock Cautious Portfolio Fund was transferred from the cautious managed to defensive.
Goldsmith added that with regard to positioning, most managers who can make high-conviction asset allocation changes had a tough 2011; in fact, some of them lost more than in 2008.
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