Although it may be six different funds, it actually equates to just four fund managers. Invesco Perpetual’s Neil Woodford has held a AAA OBSR rating on his Higher Income and Income portfolios for the past 10 years, while Jupiter’s Tony Nutt has featured them on his High Income and Income funds.
Both managers have suffered from recent underperformance in their portfolios, with Woodford’s Income fund second quartile over three years and fourth quartile over the 12 months to 30 June. Nutt’s Income fund is ranked fourth quartile over both time frames.
However, OBSR says those time frames are just a snap shot of performance and ratings are not solely based on returns. Consistency, investment style and approach are other factors considered as is whether or not analysts have conviction the managers can achieve their objectives over the long term.
Outside of Equity Income portfolios, Henderson’s strategic bond fund, Preference & Bond, is the sole fixed interest offering with an AAA OBSR rating over that length of time. John Pattullo has managed the £653m fund since 2001.
Angus Tulloch is the lone Asian equity recipient of an AAA rating throughout OBSR’s existence for his £884m First State Asia Pacific portfolio.
As of 18 July, five of the six funds also feature an existing AAA-rating from S&P, with Preference & Bond the lone exception as the fund is no longer rated by the S&P service.
Long running ratings for funds are considered difficult to achieve not just because of performance fluctuations but due to the sheer volume of manager moves and corporate actions over the years, which tends to cause rating holds or suspensions.
The six portfolios with consistent AAA ratings are indicative of this, as all four managers have been with their respective groups and portfolios that length of time.
