S&P assigns "A (New)" Fund Management Rating to Old Mutual Equity Income Fund

Standard & Poor’s Fund Services, the leading provider of qualitative fund management ratings, has assigned a "A (New)" Fund Management Rating to Old Mutual Equity Income Fund, following a detailed qualitative evaluation of the investment process and management of this fund.

This fund was taken over by Michael Gifford upon arrival at OMAM in July 2006. Gifford, whilst an experienced investment professional of 17 years' standing, is a relative newcomer to equity income funds, having specialised in them since 2000 only at his previous houses, CanLife and F&C. He established an above median performance record at CanLife, where his fund was rated "A" by Standard & Poor's. His returns at F&C were mixed, but that fund too was rated "A (New)" .

Gifford's investment philosophy has been consistent over the entire period that he has managed equity income funds in that it is top-down. He forms a macro economic view, and this dictates his sector stance. At OMAM he can draw on the vast experience of "AA" rated manager Leonard Klahr and other in-house equity teams; however, he seems quite dependent on sell-side input, especially for stock specific detail. Sector over and underweightings are allocated paying close attention to peer group weighting data obtained from Lipper, although both he and Klahr acknowledge that this is somewhat retrospective in nature. Stocks are selected to reflect the top down view, and whilst individual stocks need not fulfil the 10% yield premium requirement, the manager ensures that the portfolio as a whole does.

We have no performance data for the short period of time that Gifford has been managing the fund. However, we note his previous rated status, the strong support from Leonard Klahr, his consistent methodology and his willingness to back his own convictions within the fund mandate parameters. The fund therefore achieves an S& P "A" rating.