AMP’s star falls in rating downgrade

Morningstarhas downgradedAMP’s overall manager rating from four to three stars, following a combination of downgrades to forward-looking qualitative ratings and declining quantitative ratings for AMP’s funds.

However the new rating, which applies to AMP Henderson Global Investors, AMP Life and AMP Superannuation Limited, still denotes AMP as a ‘good quality’ fund manager.

Morningstar applied successive downgrades to AMP’s qualitative business and management strength ratings due to instability on the AMP board in March, and the announcement in May of the demerger of the Australian and UK business coupled with a planned capital raising in excess of $2 billion.

“There are significant uncertainties surrounding the restructuring, with potential negative effects on the management of AMP’s international equities,” Morningstar’s report says.

Declines in AMP funds’ relative risk-adjusted performance, together with the qualitative downgrades, has seen Morningstar also downgrade the individual funds’ star ratings, with the average fund rating falling to three stars.

Van Eyk Researchalso negatively reassessed AMP’s business management rating in May, at the time downgrading the AMP Enhanced Index Fund from “a weak A to a B” and placing the AMP Balanced Fund on hold, pending a three month review.