AA rating for Futuregrowth
One of South Africa’s leading credit rating agencies has affirmed Futuregrowth Asset Management's "AA" manager quality rating. Global Credit Ratings latest review, to September 2007, also gives Futuregrowth’s two flagship yield-enhanced funds, the Infrastructure & Development Bond Fund and the Yield Enhanced Bond Fund, ratings of "AA-", reflecting the low risk exposure of the two pioneering funds.
The report, published this month, points out that Futuregrowth’s specialist fund management model, as applied to equities and fixed income portfolios, had led to significant growth in its assets under management. These amounted to R34bn as at September 30, 2007, at the time of the review, and overall showed that Futuregrowth had recorded stable active returns over the past five years across all asset classes.
The Futuregrowth Yield Enhanced Bond Fund, which invests in listed and unlisted fixed income securities, enhances returns predominantly through asset selection and market timing. A key factor in achieving the AA- rating is Futuregrowth’s well formulated risk management systems and investment process, which enable effective management of risk and implementation of the investment strategy. The fund’s market value was R492m in September 2007, compared to R320m the previous year.
The Futuregrowth Infrastructure & Development Bond Fund which also achieved an AA- rating, at R5.9bn is currently the largest development debt fund in Africa. Created in 1995, the socially responsible investment (SRI) vehicle targets listed and unlisted debt securities in infrastructural, developmental and social upliftment projects.
The fund achieved consistent active returns in the five years to September 2007 of 13.31% against the ALBI benchmark of 12.06%. For the one and three year periods the fund delivered 11.74% and 10.88% against the benchmark of 9.03% and 9.13% respectively.
Futuregrowth director Andrew Canter welcomed the quality of the ratings and the report’s acknowledgement of Futuregrowth’s investment processes.
