Investment teams and fees critical to funds ratings
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