Five-star ratings system

WITH hundreds of managed funds open to Australian investors, one of the handy tools available is the star ratings provided by research groups like ASSIRT and Morningstar.

The star ratings provide a useful starting point for investors trying to assess the many investment options.

For instance, investors looking to invest in international shares will find just three funds with the top five-star rating from ASSIRT.

Interestingly, the three funds are very different in their investment style and objectives and therefore may comprise a good combination.

The latest addition to the five-star list is Platinum Asset Management’s flagship International Fund, discussed in detail last week. This fund pays no heed to traditional market indices and has used a mix of short selling and stock picking to achieve above-average returns.

While the Platinum fund suits aggressive investors, Deutsche Asset Management’s Enhanced Index Global Equity Fund is appropriate for more conservative investors.

It invests in a large number of stocks (up to 1000) and will therefore closely track the MSCI World ex-Australia Index. In other words, if the market rises strongly, so will the Deutsche fund, and if the market falls, the Deutsche fund will follow.

Its aim is to outperform the Index by 1 per cent per annum, before fees, over rolling three-year periods.

Sitting between these two extremes is Credit Suisse Asset Management’s International Shares fund. It is an actively managed fund investing in a range of international shares with a wide geographic spread. It also actively manages currency risk to provide additional value.

While Credit Suisse manages country allocation and currency risk, it has outsourced stock selection to Capital International.

ASSIRT says it is “impressed with Capital’s stock selection capabilities, which is an outcome of experienced portfolio managers and analysts with excellent research capabilities.”

“Capital’s process is based on a global and diversified approach, delivering strong performance over a variety of market conditions which is relatively rare in this asset class,” it says.


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