Five large cap managers win top Morningstar rating
Morningstar has awarded its premier 'highly recommended' investment rating to five large cap Australian equities fund managers.
A further 18 managers were awarded a 'recommended’ rating - out of a total 45 managers that were reviewed in Morningstar's 2004 Australian Large-cap Shares Sector Report.
The five highly recommended managers in the annual review were Barclays Global Investors,GMO, Investors Mutual, Perennial Value and Perpetual.
This represents one more than received a highly recommended rating in the 2003 review, while seven more mangers received a 'recommended’ rating in 2004 than in 2003 - due largely to the addition of 15 new managers to the sector during the year.
Seven managers were awarded an upgraded rating in 2004 on the basis of Morningstar's assessment of their short-term strategies, and nine were downgraded.
The most frequent reason for a rating downgrade in 2004 was team instability, and for an upgrade the addition of resources.
Four managers received a hold rating - Alliance Capital, Credit Suisse, HSBC and Merrill Lynch - due to concerns over key team changes, although no managers received an 'avoid' rating in 2004, compared to two in 2003.
The 2004 report cautions that while style and size factors have helped value style managers in the sector deliver competitive returns, the “free ride” appears to be over.
The report predicts a “more subdued” investment performance by active managers in the large cap sector in 2005 than the 20 per cent plus returns that were achieved last year.
“The level of outperformance by active managers in the sector is predicted to continue to decline in correlation with declining volatility in stock returns over time and between market sectors, which has depressed most managers active risk profiles,” Morningstar said.
Recommended for you
Results are out for the latest sitting of the ASIC financial advice exam, with the pass rate falling for the second consecutive sitting.
Adviser losses for the end of June have come in 143 per cent higher than the same period last year, and bring the total June loss to over 350.
ASIC’s enforcement action is having an active start to the new financial year, banning a former Queensland financial adviser for 10 years in relation to fees for no service conduct.
ASIC has confirmed the industry funding levy for the 2024–25 financial year, and how much licensees can expect to pay.
