ING retains rating from Morningstar

INGhas retained its overall four star fund manager rating fromMorningstardespite being marked down in two of its sector strength ratings: Australian fixed interest and enhanced cash management.

The re-rating has come on the back of recent news that ING andANZwill be establishing a joint venture in their funds management capabilities, ING Australia, about which Morningstar has identified integration risks associated with merging the two units.

ING’s Australian fixed interest and enhanced cash management ratings were downgraded from positive to neutral by the research house.

Another risk identified by Morningstar was that the increase in size of the combined group could be detrimental to the overall performance. However, the research house believes ING already has the capacity and well developed client service culture to manage the increased growth, and so it retains a “positive” outlook for its Australian equities rating.

Morningstar also believes the existing investors in ANZ funds management stand to benefit from the new joint venture.

“The JV gives ANZ’s fund investors more stable and sound investment product manufacturing capability than previously, and also the benefit of [ING’s] marketing and distribution expertise,” the report says.

The joint venture now places ING/ANZ as the fourth largest fund management group, says Morningstar, so ANZ’s fund investors will be relying on the distribution capabilities of ING. Morningstar argues this will be a very competitive environment, given the Commonwealth/Colonial and National/MLC groups have similar strategies and similar goals.