Morningstar claims more funds needed at Perennial
Perennial Investment Managementmust increase its international equities funds under management (FUM) in order to remain viable over the long-term according to research houseMorningstar.
According to the research house the group has been a strong performer over the past three to five years, but has made the claim after completing a review ofIOOF’s international funds, which Perennial has managed since 1999 using its ‘growth at reasonable price’ (GARP) strategy.
Morningstar argues that with $110 million in FUM, “Perennial needs to grow funds under management in international equities significantly to achieve the economies of scale necessary to ensure its business is sustainable in the long-run.”
Of the $110 million Perennial manages in international equities, $10 million is invested indirectly through its Japanese Equity Trust.
The review by Morningstar resulted in an moderate rating of three for IOOF/Perennial - with one being the worst and five the highest.
The partnership was branded ‘strong’ on performance with the IOOF Flexi Trust outperforming its benchmark by 4.12 per cent (net of fees), however the research house deemed Perennial’s compliance to be ‘weak’ as “each regional portfolio manager is responsible for trading and execution for their particular region”, which Morningstar claimed was below market best practice.
IOOF/Perennial was branded ‘average’ in all other assessed areas, which included investment process, portfolio construction and execution, process development and review, investment team and risk management.
Perennial's investment philosophy is based on the premise that markets at times tend to 'overshoot', and that Perennial can take advantage of these short-term market valuation 'inefficiencies' as a long-term investor.
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
