Following a downward trend in the performance of its funds,Morningstarhas downgradedCredit Suisse Asset Managementfrom a five to a four star fund manager.
The new rating moves Credit Suisse from an ‘excellent quality’ fund manager to only a ‘very good quality’ fund manager in Morningstar’s eyes.
According to Morningstar, which gives star ratings to individual funds as well as to the fund managers that offer them, the downgrade was the result of declining performance from both a risk and return perspective by Credit Suisse funds relative to their peers.
“Its poor performance in the Australian equities sector was the primary reason for the downgrade,” Morningstar’s head of research Daisy Chee says.
“As a consequence, its high growth and capital growth funds, with substantial weightings in Australian equities, also dragged its asset weighted quantitative scores down.”
Throughout last year, 31 per cent of Credit Suisse’s funds had five star Morningstar star ratings.
However by December, the number of Credit Suisse funds with a five star rating fell to 23 per cent, deteriorating to 20 per cent by the end of January this year.
Average performance and greater volatility have been attributed to the downgrades, as has average downside risk and less efficiency compared to the fund manager’s peers.
“These downward trending quarterly ratings ultimately led to the lower Morningstar star ratings for many of Credit Suisse’s fund,” the Morningstar report states.
Morningstar ratings for Credit Suisse and its funds will be recalculated on a monthly basis.
