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Morningstar gives unwanted Xmas presents

Morningstar gives two managers Christmas presents they can't return.

Sunday, January 7th 2001, 11:34PM

by Philip Macalister

Research house Morningstar delivered unwelcome presents to two major fund managers on the last working day before Christmas.

On the Friday before Christmas Morningstar downgraded AMP from a five star manager to a four star one. Likewise it dropped BT Funds Management Australia from a four star rating to a three.

The reasons for the two downgrades were similar.

Morningstar maintains that a growing number of funds managed by each company have suffered significant drops in both performance and quality.

In AMP's case Morningstar says: "The downgrade has been driven by a fall in the Morningstar Star Ratings of many of AMP’s funds."

"The percentage of AMP funds with five star Morningstar Star Ratings has fallen sharply (down from 34 percent at 30 June 2000 to 12 percent at 30 November 2000), while the percentage of one star funds has more than doubled, from eight to 18 percent over the same period."

Morningstar, which has just completed a two yearly review of AMP, says that the company has been downgraded in a number of areas, including: corporate strength, administration and distribution, and investment management.

It says the company is below average in all these areas.

Likewise it says that the performance of AMP's funds have been falling in the past six months.

It says, "63% of AMP’s funds had achieved consistently average or better performance over the short-, medium- and long-term from both a risk and return perspective compared to peers at 30 June 2000. However, this trended downwards to 59 percent by 30 November 2000."

"The lower Ql (qualitative) Ratings and declining Qt (quantitative) Ratings led to lower Morningstar Star Ratings for many of AMP’s funds. Ultimately, this meant that at 30 November 2000 AMP fell below the benchmark required to maintain a five star Morningstar Star Rating, and therefore achieved four stars, denoting a ‘very good’ quality fund manager in Morningstar’s opinion."

Good Returns will provide more detail on these downgrades and reaction from the managers later this week.

You can read Philip's blog here: http://www.goodreturns.co.nz/blog/

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AMP Home Loans 7.24 5.99 6.39 6.65
AMP Home Loans $200k+ 7.14 5.89 6.29 6.55
AMP Home Loans LVR <80% - - 5.85 6.29
ANZ 6.74 6.05 6.49 6.65
ANZ LVR > 90 6.74 6.55 6.99 7.15
ANZ Special - - 5.99 -
ASB Bank 6.75 6.09 6.40 6.65
ASB Bank Special - - 5.99 -
BankDirect 6.75 6.09 6.99 6.65
BankDirect Special - - 5.99 -
BNZ - Classic - - 5.99 6.25
Lender Flt 1yr 2yr 3yr
BNZ - GlobalPlus 6.74 5.99 6.39 6.59
BNZ - Mortgage One 7.15 - - -
BNZ - Rapid Repay 6.74 - - -
BNZ - Std, FlyBuys 6.74 5.99 6.39 6.59
BNZ - TotalMoney 6.74 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.45 5.90 6.50 -
Credit Union North 6.45 - - -
Credit Union South 5.75 - - -
eMortgage 6.04 6.15 6.69 7.19
Finance Direct 6.10 6.45 6.69 7.10
Lender Flt 1yr 2yr 3yr
First Credit Union 6.45 - - -
General Finance 5.95 6.25 6.50 7.10
HBS Bank 6.15 5.85 5.99 6.25
HBS Special - - - 5.95
Heartland 6.45 6.75 7.00 7.60
Heretaunga Building Society 6.25 5.85 6.50 -
Housing NZ Corp ▲6.74 ▼5.99 ▼6.19 6.60
HSBC Premier 6.84 5.95 ▼5.95 ▲6.55
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 6.75 5.99 6.39 -
Lender Flt 1yr 2yr 3yr
Kiwibank 6.40 5.99 6.39 6.65
Kiwibank - Capped 5.65 6.50 - -
Kiwibank - Offset 6.30 - - -
Kiwibank LVR > 80% - - 5.99 -
Liberty 5.64 - - -
Napier Building Society 5.80 6.00 6.70 -
Nelson Building Society 6.95 6.15 6.60 -
NZ Home Loans 6.85 6.09 6.40 6.65
Perpetual Trust 7.70 - - -
RESIMAC LVR < 80% 6.59 ▲6.35 ▲6.58 ▼6.77
RESIMAC LVR < 85% - - - -
Lender Flt 1yr 2yr 3yr
RESIMAC LVR < 90% - - - -
RESIMAC LW DOC - - - -
SBS Bank 6.15 5.85 5.99 6.25
SBS Bank Special - - - 5.95
Silver Fern 5.95 6.10 6.55 7.05
Sovereign 6.85 6.09 6.40 6.65
Sovereign Special - - 5.99 -
The Co-operative Bank 6.70 6.00 6.00 6.25
TSB Bank 6.74 6.00 6.19 6.60
TSB Special - - 5.80 -
Wairarapa Building Society 6.20 5.75 5.95 -
Lender Flt 1yr 2yr 3yr
Westpac 6.59 6.09 6.39 6.65
Westpac - Capped rates - 6.74 6.99 -
Westpac - Offset 6.59 - - -
Westpac Special - - 5.99 -
Median 6.64 6.03 6.39 6.65

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