Letter 26/10 – Morningstar should be held accountable
The board and staff of County Investment Management (CIM) are disturbed by Kate Kachor’s article in the October 12 edition of Money Management.
The assertion (attributed to Morningstar chief executive Graham Rich) that many of our funds "are in a state of flux and turmoil following the announcement of the sale" (of CIM) is inaccurate, misleading and damaging in its inference.
We can categorically assure all our clients and their advisers that it is very much business as usual. The sale process is not affecting a single fund. All of our funds continue to be managed by a large and stable team of investment professionals complemented by recent high quality additions, each dedicated to working for our clients. They continue to operate within a disciplined framework applying a consistent and proven investment philosophy.
This is best evidenced by our Superannuation Growth Trust outperforming all other pooled balanced funds in the 15 years to September 30, 2000. Moreover, this fund probably remains the only such fund that has employed a consistent philosophy, process and with key personnel still involved.
We were naturally disappointed with the Morningstar re-rating. We strongly disagree with the analysis supporting it. However, we are greatly comforted that our clients, other research houses, asset consultants and ratings organisations do not share that assessment.
Even though the users of such research, ratings and advice are well served by the majority of service providers, perhaps the time has come to recognise the enormous responsibility and market power such organisations have. Arguably their influence on investment decisions is greater than that of a prospectus.
Perhaps they should be subject to the same rigorous regulatory framework, transparency and scrutiny as already applies to investment managers and the public documents they prepare.
Let me conclude with the assurance that County Investment Management remains committed to the high ethical standards and professionalism that has characterised our 15 year history.
<I>Charles Macek
Chairman
County Investment Management
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