Research house Lonsec has assigned its initial ratings for two managed investment funds – the AllianceBernstein Global Equities Fund and Macquarie Specialist Investments (MSI) Dividend Run-Up Fund.
The AllianceBernstein offering was awarded a Recommended rating, with Lonsec noting the underlying strategy the fund employs has a well-established record despite the product’s limited performance track record.
The recommended rating reflects Lonsec’s belief the fund can deliver risk-adjusted returns in line with its objectives and represents an appropriate entry point to this asset class or strategy.
The research house also acknowledged AllianceBernstein was charging attractive fees on the product relative to its competitors and had a stable and experienced management team working on the fund.
The AllianceBernstein Global Equities Fund invests in global equities with a long time horizon and is aimed at investors with a high risk tolerance searching for capital growth with some income.
Meanwhile, the MSI Dividend Run-Up Fund was assigned an Investment Grade rating by the research house.
The rating indicates Lonsec feels the fund can generate risk-adjusted returns in line with its objectives, but has fewer competitive advantages than its peers.
The MSI offering invests in high-yielding Australian equities and looks to provide investors with the opportunity to earn returns via distributions from dividends and trading gains.
The fund also incorporates a risk management overlay that provides downside protection to the value of about 30 per cent of any losses incurred.
The fund has generated a 6.21 per cent a year return, after fees and including franking credits, since its inception in April 2013.
“The fund’s inaugural rating is timely because allocating capital for risk-averse clients remains a challenge for market participants,” MSI co-head of distribution Lee Hayes said.
“With interest rates at historically low levels and with some prevailing uncertainty in global bond markets, traditional go-to asset classes may not be appealing to many.
“The recent retreat in equity markets may present opportunities, however, for some clients, the risk of significant capital loss means this option may also be off the table.
“The fund’s risk management overlay means that while it will underperform long-only funds in periods of strong returns, in periods of bearish, flat or moderately rising markets, it has the potential to provide superior total returns to traditional long-only equities funds.”
