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Fund managers get a new look at themselves

Mirror mirror on the wall who is the best fund manager of all?

Friday, July 4th 2003, 9:58PM

Mirror mirror on the wall who is the best fund manager of all?

Fund managers looking at themselves in the mirror of research house ratings must sometimes think that it’s like going to the crazy mirrors section of the local circus. In one mirror they look tall and thin and in another they are short and wide. Morningstar’s new ratings which were released today certainly reflect a different picture to their old system.

The best looking manager (with five stars) is the National Bank – an outfit which packages up funds, rather than doing the actual asset management, and the ugliest is Westpac, which not that long ago was a five star manager.

Morningstar has come up with the new looks by biffing out all the qualitative elements of its rating system and doing it just on performance numbers.

This makes the ratings objective, and fair – just like looking in the ordinary bathroom mirror.

Another of the major changes is that it has used a “normal” distribution. That is there is always going to be a winner and loser.

Assuming this new rating system is transparent and equitable, can we then say that the changes in ratings show the level of subjectivity and bias in the old system?

After all some people did have the view that mates got rewarded with higher ratings than they deserved.

Morningstar’s new boss Scott Cooley acknowledges that there was probably a positive bias in the ratings – just like sharebrokers always have buy, accumulate or hold ratings, but few straight sells.

However, he doesn’t say that mates got a good deal.

While the new system has been well-received by some others aren’t so happy.

To find out more about the ratings read:

NBNZ tops new Morningstar ratings
Managers have their say on new ratings
Have your say on the new system - go to the discussion forum here

People on the move

The biggest shock of the week was Fiona Judd’s decision to exit Broadbase and join SAM – Alex Fowler’s Strategic Asset Management group. She says Broadbase hadn’t done anything to make her move (although we hear stories that one large fund manager tried to buy the business), rather it was a meeting of like minds on investment philosophy with SAM.

New Zealand’s answer to Robert Kiyosaki is……

Martin Hawes. Martin’s latest book, Get Rich, Stay Rich exudes Kiyosaki, but is better as it’s New Zealand based and doesn’t rely so much on the folksy Rich Dad Poor Dad theme.

What’s interesting about the book is that Hawes is positioning himself as a financial planner in the “life planning” mode.

To read a review on the book click here
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AIA - Back My Build 4.94 - - -
AIA - Go Home Loans 7.49 ▼5.79 ▼5.49 ▼5.59
ANZ 7.39 6.39 6.19 6.19
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.79 5.59 5.59
ASB Bank 7.39 ▼5.79 ▼5.49 ▼5.59
ASB Better Homes Top Up - - - 1.00
Avanti Finance ▼7.90 - - -
Basecorp Finance ▼8.35 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.54 - - -
BNZ - Rapid Repay 7.54 - - -
BNZ - Std 7.44 ▼5.79 ▼5.59 5.69
BNZ - TotalMoney 7.54 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - ▼5.69 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 6.95 ▼5.79 ▼5.59 5.69
Co-operative Bank - Standard 6.95 ▼6.29 ▼6.09 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - ▼5.99 ▼5.89 -
First Credit Union Standard ▼7.69 ▼6.69 ▼6.39 -
Heartland Bank - Online ▼6.99 ▼5.49 ▼5.39 ▼5.45
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.60 6.65 6.40 -
ICBC 7.49 ▼5.79 ▼5.59 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.25 6.89 6.59 6.49
Kiwibank - Offset 7.25 - - -
Kiwibank Special 7.25 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society ▼7.94 ▼5.75 ▼5.99 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank ▼7.49 6.95 6.29 6.29
SBS Bank Special - 6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo ▼4.94 5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.19 6.49 ▼6.39 ▼6.39
TSB Special 7.39 5.69 ▼5.59 ▼5.59
Unity 7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.10 6.05 5.79 -
Westpac 7.39 6.39 6.09 6.19
Westpac Choices Everyday 7.49 - - -
Westpac Offset 7.39 - - -
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Westpac Special - 5.79 5.49 5.59
Median 7.49 5.99 5.79 5.69

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