It says that while Fisher Funds has been experiencing "some testing times" it is assured that founder Carmel Fisher can "stay ahead of the market and many rivals over the long term."
Morningstar says two clouds hover over the firm; one is the departure of chief investment office Warren Couillault, and the other is the size of the strategy and liquidity of some holdings.
Couillault's departure is a blow, as there's no doubt he played a key role in the strategy's success during his five years at the firm.
However, Morningstar says not to underestimate Fisher and to remember the firm moved quickly to make a new appointment. Recently it appointed Murray Brown as a senior analyst. Morningstar says Fisher has $400 million invested in its strategy and that it is highly-concentrated and holds some small illiquid stocks.
On the positive side Morningstar says Fisher is well aware of these issues and is able to handle the associated risks.
Morningstar's strongest criticism is over a fee hike last year. It says it's "not overly enthused about the fee hike" which saw the management fee rise to 1.5% plus a performance bonus related to the 90-day bank bill rate.
"This now makes it one of the more expensive New Zealand offerings. We'd prefer to see an equities-based hurdle, which would be more appropriate for this strategy than cash."
Morningstar says it's "comfortable that (Fisher's) strategy's in good shape, and have no problem continuing to endorse it as a supporting player."
It suggests the fund should be used in tandem with a core domestic equities holding.
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