Morningstar alters rating process

morningstar fund managers asset classes

19 November 2002
| By George Liondis |

TheMorningstarresearch house has announced sweeping changes to its rating of fund managers and their funds in Australia, less than one week after dismissing its head of research, Daisy Chee.

The changes were announced yesterday by the group’s US based managing director, Don Phillips, after Chee was given her marching orders at the research house last week.

The changes will see Morningstar calculate both a three and five year quantitative rating for fund managers, which will then be combined to produce an overall quantitative rating.

Morningstar will also adopt a new process for determining the quantitative ratings.

The process, known as the Morningstar Risk-Adjusted Return (MRAR), will penalise the risks inherent in returns from all funds across all asset classes equally.

The process differs from Morningstar’s previous quantitative assessment methodology, which compared a fund’s risk and return characteristics only against those of similar funds.

The new process will be implemented for all Australian funds rated by Morningstar from the middle of December this year.

Phillips says the new method will bring Morningstar’s Australian operations more into line with the group’s global operations.

However he says Morningstar’s overall star rating of fund managers will continue to be based on a 50/50 split between quantitative and qualitative assessments.

The assurance comes in the face of continuing speculation that Morningstar would pull out of the qualitative rating of fund managers in Australia to more closely reflect its operations in other countries.

Due to legal constraints, Chee was unable to comment on the reasons for her dismissal last week.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

1 month ago

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

1 month 1 week ago

Interesting. Would be good to know the details of the StrategyOne deal....

1 month 1 week ago

Insignia Financial has confirmed it is considering a preliminary non-binding proposal received from a US private equity giant to acquire the firm. ...

2 weeks 3 days ago

Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses. ...

1 week 6 days ago

Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equi...

1 week 5 days ago