Lonsec first to shift Colonial small cap rating
Lonsechas become the first research group to change its rating for theColonial First State(CFS) Future Leaders Fund, moving it to a hold position after senior portfolio manager Barry Henderson indicated he would retire in January.
Other research houses were yet to release an updated rating on the fund asMoney Managementwent to press, withAssirtandMorningstardue to meet with Colonial late last week.
Lonsec, however, has said Colonial was deserving of some credit with the immediate naming of a successor for Henderson in Graeme Burke, who has been working with Henderson since late 1997.
The downgrade of the fund by Lonsec is the third this year, with the previous two downgrades centring on the issues of size and performance, with Lonsec claiming its performance against other small company funds had decreased.
Part of this drop was the result of the manager’s growth style being out of favour, while the size of the fund, currently over $1 billion, or about three per cent of the total Australian small company market by capitalisation, was also of concern to Lonsec.
A number of other small companies fund managers, includingPerpetual,ING,JB WereandInvestors Mutual, have cut their funds off from new investors this year to protect investment performance.
However, CFS says its funds, which currently have more than $1.35 billion in funds under management between them, will remain open for the foreseeable future.
The Lonsec research group will meet with CFS next week and hopes to release further analysis after that date.
AUTHOR
Jason Spits
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