Link to Fitch Ratings' Report: UBS (Lux) Equity SICAV -- USA Growth (Managed by UBS Global Asset Management)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=842088
Fitch Ratings has affirmed UBS (Lux) Equity SICAV USA Growth SICAV's (the fund) Quality Rating at 'Strong'. The fund is managed by UBS Global Asset Management (UBS GAM). (For more details, see Fitch's full rating report.)
KEY RATING DRIVERS
Fund Overview
Launched in October 2004, the fund is UCITS compliant, Luxembourg-domiciled fund that seeks to outperform the Russell 1000 Growth NR index by 300bps per annum over a full market cycle. The fund had USD3.4 billion in assets as of Nov. 28, 2014 and is biased towards the technology, consumer discretionary and healthcare sectors.
Investment Process
The co-portfolio managers (PMs) analysts Peter Bye and Daniel Neuger lead in a team of seven credit analysts (including them) to screen the investment universe for strong growth fundamentals and attractive valuations. Identified companies are tracked written up in formal reports and critiqued at weekly meetings. Stress cases reflect views on market and provide inflection points for trading. Entry and exit points are primarily driven by price targets, which are maintained by the team on spreadsheets and continuously monitored.
Resources
The Large Cap Equity Growth team within UBS enjoys relative autonomy and individual accountability, underlined by the investment freedom it has. The research team is small (seven analysts), focused on growth stock, generating research in a disciplined manner but operating in a flat management structure, led and directed by two co-PMs (which are included in the analytical coverage as well).
Track Record
The fund has a fair track record. It has outperformed its Lipper category but has lagged its growth-specific benchmark over one, three, and five years, thereby falling short of its objective. In 2014, the fund suffered in relative performance from having higher allocation to stocks that are considered more value than growth by the market. Relative to the Lipper category, the fund returned 11.3% which exceed the Lipper category average of 10.6%. The fund also exhibited a 12.3% standard deviation, which was higher than the group median of 10.4%.
Asset Manager
UBS GAM is a division of UBS AG ('A'/Outlook Stable/'F1'). UBS GAM managed USD679 billion in assets under management as of 30 Nov 2014, of which USD238 billion constituted equity strategies and USD12.5 billion constituted the Large-Cap Equity Growth strategy to which the fund belongs.
RATING SENSITIVITIES
The rating may be sensitive to material changes in the investment or operational processes, or resources dedicated to the fund. A material adverse deviation from Fitch's guidelines for any key rating drivers could result in a downgrade of the rating. For example, this may be manifested in the departure of key investment professionals or in significant deterioration in the fund's performance relative to its benchmark and peers, resulting from stock-picking errors on large holdings.
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.
For more information, please see fundmanagement.fitchratings.com
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Applicable Criteria and Related Research:
--'Fund Quality Rating Criteria' (Sept. 19, 2014).
Applicable Criteria and Related Research:
Fund Quality Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750069
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=959295
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Contacts:
Fitch Ratings
Primary Analyst
Yuriy Layvand, CFA
Director
+1-212-908-9191
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Secondary Analyst
Alastair Sewell, CFA
Director
+44 20 3530 1147
or
Committee Chairperson
Ian Rasmussen
Senior Director
+1-212-908-0232
or
Media Relations
Brian Bertsch, +1 212-908-0549
brian.bertsch@fitchratings.com
