Investment teams and fees critical to funds ratings

Staff Writer

Financial Newswire

20 December 2021

The importance of the make-up and stability of fund manager investment teams has been reinforced by the latest Morningstar Australian equities sector wrap which saw 12 unlisted funds achieve ratings upgrades while 12 were downgraded.

And in explaining its decision-making, Morningstar made clear that investment team make-up rated high on its list of must-haves, alongside fees.

It said that of the 12 funds which had been upgraded, it was owed either to Morningstar’s increased conviction in their investment teams, research capability, and investment processes

The research and ratings house also nominated the benefit of achieving a stronger assessment under its enhanced ratings system because of lower fees.

“We downgraded six unlisted funds owing to reduced confidence in the investment team, diminished conviction in the investment processes, or lower assessment under our enhanced ratings system because of expensive fees,” it said.

The 12 funds to be upgraded by Morningstar were:

Alphinity Concentrated Australian Share 12177

Celeste Australian Small Companies 6419

Dimensional Australian Core Equity Trust 14318

Dimensional Australian Value Trust 5840

Fairview Equity Partners Emerging Companies 17008

FSI Wholesale Australian Small Companies 7006

FSI Wholesale Geared Share 4715

Pendal Focus Australian Share 12910

Pengana Emerging Companies 12260

Perpetual Wholesale Industrial 4362

Perpetual Wholesale Ethical SRI 8649

Tyndall Australian Share Income 16966

Those funds to be downgraded were:

Australian Ethical Australian Shr WS 19344

Eley Griffiths Group Small Companies 10463

Fidelity Future Leaders 19893

Investors Mutual Equity Income 12285

NovaPort Smaller Companies 9140

Pendal Smaller Companies 2725