NZ ratings shake-up

fund manager morningstar westpac chief executive

28 August 2003
| By Phil Macalister |

MORNINGSTAR'S new quantitative measuring rating system released last Friday has fuelled major changes to fund manager ratings in New Zealand.

The biggest positive mover is National Bank, which has moved from a three-star manager to the only five-star manager.

This move has been greeted with some surprise as National Bank, which is currently on the market, is a packager of products these days, as opposed to being an asset management firm.

The biggest loser is Westpac, sliding from four stars (five not that long ago) to the only one-star manager.

Morningstar chief executive Scott Cooley says the new ratings are far more transparent than the previous model, which rated managers 50/50 on quantitative and qualitative measures.

Another major shift is the normalisation of the distribution of ratings, that is, one and five-star categories each account for 10 per cent of the market, two and four-star managers make up 22.5 per cent each of the universe and the remainder are three-star managers.

Other changes include the rating of managers that opted out of the old system, such as Sovereign, ASB Bank and Fidelity.

However, a number of niche managers, like Macquarie,JB Were, Equitable and Fisher Funds, are no longer rated as they hold insufficient funds across asset classes.

Towergeneral manager Richard Baker says the new system also penalises organisations that dominate sectors with a small number of funds.

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