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May 30 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has assigned Yapi Kredi Bank's Fixed Income Private Banking Variable Growth Fund, a fund managed by Yapi Kredi Portfoy, a 'Satisfactory' Fund Quality Rating.
The ratings reflects the fund's disciplined approach in its selection of return generating assets with a focus on fixed income instruments and the monitoring of asset allocation. Allocation decisions focus on a top-down driven fundamental, macroeconomic assessment that drive asset class returns. This is supplemented by consideration of quantitative models and scenario analysis for asset selection.
The dynamic investment approach is directed by the manager's formal investment committee and related sub-committees i.e. for private sector bond selection which convenes on a weekly basis. Defined allocation bands for fixed income exposure and active weights for alternative income sources are key drivers in the portfolio construction process supported by the equity team. Within this framework the lead PM enjoys controlled freedom to operate within the given guidelines. The fund operates a distinct stop loss discipline under supervision of the independent risk department beyond its formal tracking error and value at risk limits.
The fund has slightly underperformed the Lipper category "Global Mixed Asset TRY Conservative" over three years but notably outperformed over a five year horizon at end April 2013. The Lipper Leader Consistent Return score is four (second highest quintile) over five years, and three over three years.
The fund is a balanced fund that mostly invests in fixed income securities. It seeks to increase return by investing selectively in equities, gold and foreign exchange. The fund's performance is driven by an opportunistic asset allocation that reflects the manager's holistic market analysis (both short and long-term) towards the relevant asset classes.
The current lead portfolio manager has been managing the fund since inception. The co-manager is the head of Yapi Kredi Portfoy's fixed income department with more than 17 years of investment experience and 10 years of company tenor. The lead PM also takes recourse to the assigned co-manager for the equity component who heads the firm's equity team.
The overall investment process has been broadly stable since inception, but the fund changed its benchmark on 2 January 2013. Among others it increased the benchmark duration the share of the equity index component (from 1% to 10%). The Yapi Kredi Bank's Fixed Income Private Banking Variable Growth Fund is a Turkish domiciled fund, launched in February 2005 with TRY107.0m of assets, as of end-April February 2013.
Yapi Kredi Portfoy (Asset Manager Rating 'Highest Standards(tur)') is one of Turkey's market leaders in the asset management industry with TRY10.2bn assets under management (AuM) as of end-March 2013. The company has a long track record of managing domestic fixed income and variables funds. The fixed income team currently manages a total of around TRY4.8bn with a majority in money market and short term bonds and bills funds which comprises the larger part of the manager's AuM.
Fitch's Fund Quality Ratings combine Fitch's experience in qualitative fund analysis with rankings and performance data from Lipper, a Thomson Reuters company. Fitch's Fund Quality Ratings offer an independent, forward-looking assessment of a fund's key performance and risk attributes and consistency of longer-term returns, relative to peer group or benchmarks. The ratings focus on the fund manager's investment process, key fund performance drivers, risk management, and the quality of the fund's operational infrastructure.
Fund quality ratings may be sensitive to material changes in the investment or operational processes or market risk profiles of the fund. A material adverse deviation from Fitch's guidelines for any key rating driver could cause Fitch to downgrade the ratings. For example, notable structural deterioration in the fund's performance or departure of key investment professionals may cause a lower rating.
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