CFS takes rap on Generation Fund fees
The Al Gore-connected Generation Fund has earned a favourable assessment from ratings house Morningstar, except with respect to the fees being charged by local distributor ColonialFirstState.
The Morningstar assessment said the Generation Fund’s long-term approach to global equities investing is one in which the ratings house can see many attractive attributes, but added: “It’s just unfortunate for Australian investors that local distribution partner Colonial First State has structured the Australian product in a way that dims the appeal.”
It said that despite being one of the “most hyped fund launches of 2007”, Morningstar believed Generation’s focus on sustainability was actually a measured approach that had sound investment merit.
The Morningstar assessment said while the Generation strategy was seen by many as a socially responsible investment (SRI) offering, it was not in reality an ethical fund, and this was part of its appeal.
“Rather than negatively screening out certain sectors, as many similarly-marketed funds do, this approach is based on what we consider a sound and intuitive way of identifying attractive stocks,” it said.
Morningstar said that its main gripe with respect to the Generation Fund was the level of fees Colonial First State was charging local investors.
“We have no problem with performance fees, but only when the base fee is lower than the peer average, which is not the case with this strategy,” the analysis said.
AUTHOR
Mike Taylor
Recommended for you
BT is to launch a new low-cost “Focus” investment menu for its Panorama platform this October, in partnership with Vanguard, seeking to compete with industry superannuation funds.
Net gains of financial advisers have already doubled since the start of FY25, according to this week’s Padua Wealth Data, with momentum gathering pace far faster than the previous financial year.
National advice firm MiQ Private Wealth has appointed a new chief executive to lead the business through a “transformative era” after penning a partnership deal with AZ NGA earlier this month.
WT Financial’s managing director, Keith Cullen, believes the firm’s Hubco model with Merchant Wealth Partners will be a “repeatable growth model” for the business as it scales its adviser numbers.
