Star wars: Morningstar strikes back

Morningstar has vowed to fight ASSIRT’s launch of a star ratings system for managed funds.

Managing director Graham Rich confirms that his group is pursuing legal channels for possible contraventions of the Trade Practices Act.

However, he adds that Morningstar is also trying engage in constructive discussions with ASSIRT to address the issues.

ASSIRT's recently launched star system parallels the highly influential star system used by Morningstar in the US and Australia.

"I am not sure whether we should feel flattered or feel that we have just had an ear bitten off in a boxing ring with Mike Tyson," Rich says.

He believes ASSIRT's move will create confusion in the market place.

"Some one will look in a newspaper on one day and find a certain rating and then look in a paper a few days later and find another," he says.

However, ASSIRT managing director Brett Sanders says: "Our view is that stars are used for all sorts of things. People who use our ratings have shown a preference for stars. Investors seem to like them and if that is what they want, why shouldn't we give it to them?"

He adds that ASSIRT will brand its presence, displaying its name and logo prominently, when its star system is used. It will also provide an overview of its process when space permits, for example, on Internet sites.

The star used by ASSIRT looks the same as the one used by Morningstar, but Sanders says: "We looked at whether we could get a different star, but from a production point of view, it was difficult. By and large, newspapers and Internet sites have to work with certain fonts."