S&P says Invesco fund rating “under pressure”

Standard & Poor’s (S&P) has said the A/V4 rating on David Todd’s Invesco Global Investment Grade Corporate Bond fund is “under pressure”.

In its latest report on the Luxembourg-domiciled Sicav, S&P points out that it has “lagged its benchmark over each calendar year and on an annualised basis” since launch in 2009, with recent performance being “particularly detrimental”.

According to the most recent factsheeet, the £12.5m fund returned 1.77% during 2011 compared with the Barclays Global Aggregate Corporate index’s 4.79%. In 2010, annual returns were 5.74% against the index’s 7.24%.

Looking at the record of Todd’s team outside of the fund, S&P says that performance was good in 2008 when it avoided subordinated financial debt. The fund’s underperformance of 2011, however, was due to Todd’s subordinated financials exposure. (article continues below)

“Invesco’s experienced team and stable process allow the fund to retain its S&P A/V4 rating; however, it is under pressure,” the agency concludes.

Last week, S&P expressed concern over the performance of Dublin-domiciled Invesco Bond fund managed by Mark Nash.

The news came as the fund ratings agency cut the volatility rating on the Luxembourg-domiciled, A-rated BlackRock BGF Global Government Bond Sicav to V2, the second lowest volatility rating the agency awards.

S&P says the rating was cut due to its “consistently low volatility” compared with peers and government bonds.

Although the agency did say it would prefer greater stability from the management team, which saw former co-manager of the fund Andrew Gordon retire in December.