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Jan 27 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has assigned Henderson Horizon Euro Corporate Bond Fund, a fund managed by Henderson Global Investors (Henderson), a a€˜Stronga€™ Fund Quality Rating.
The a€˜Stronga€™ rating reflects the funda€™s robust and well-balanced investment process. It also reflects the depth of experience of the Henderson credit team, a robust risk and operational management framework and a strong track record.
KEY RATING DRIVERS
Fund Presentation Launched in December 2009, the Henderson Horizon Euro Corporate Bond Fund is a sub-fund of the Luxembourg SICAV Henderson Horizon Fund. The fund had EUR1.6bn assets under management (AUM) at end-December 2013, making it one of the largest cross-border funds focused on European investment-grade (IG) corporate debt.
In Fitcha€™s view, the funda€™s competitive edge is its superior EUR IG credit selection skill and its flexible allocations in high-yield (HY) and non-euro IG credits, within a tracking error target of 2-3%. Macro house views, formalised at monthly strategy meetings, inform risk budgets and top-down allocations, while allowing portfolio managers (PMs) sufficient flexibility in portfolio construction and security selection. Credit research recommendations are effectively communicated to PMs through concise memos and direct interaction.
Risk modelling, stress tests and comprehensive, independent centralised risk reporting facilitate the risk management process.
The lead PM, C. Bullock, has over 11 years of credit experience, all acquired at Henderson. He has managed the fund since its launch in 2009.
The European credit team of 16 investment professionals includes four PMs, seven analysts and three dedicated traders.
The fund also benefits from the depth of Henderson resources in operational support and controls (including seven in risk management).
The fund had outperformed its Lipper category by close to 10% over three years to end-December 2013. It demonstrates higher volatility and beta than peers but this is non-structural. The fund has shown an ability to preserve alpha in the long term, as illustrated by the swift recovery after the June 2013 drawdown (peak to trough decline in value).
Henderson is a listed, global asset manager with GBP70.8bn AUM, including EUR15bn in credit at end-September 2013 (EUR4.5bn being managed under an actively managed benchmark strategy similar to that of the Euro Corporate Bond fund).
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 driver could result in a downgrade of the rating. For example, this may be manifested in significant structural deterioration in the fund's performance relative to its benchmark and peers, an excessive risk deviation or the departure of the lead PM or his back-up.
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.
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Link to Fitch Ratings' Report: Henderson Horizon Euro Corporate Bond Fund