Morningstar rates IOOF as mid range
Morningstarhas released its business and management strength rating forIOOFand its funds management armPerennial Partnersgiving the group a three out of five rating, placing it within the middle third of managers rated by the research house.
Morningstar summarised its findings by stating that while Perennial had yet to become profitable since its launching, early success had come through good investment performance in some asset classes but was offset by a lack of growth in funds under management.
The research house also says that the dual branding of IOOF/Perennial was confusing for retail investors but IOOF was working on building distribution through the part purchases of dealer groups, a program which would be boosted by the upcoming demutualisation of the group.
In the nine areas which make up the BMS rating, IOOF/Perennial was considered to have average performance in six areas and weak in the remaining three, but most areas were said to have a positive outlook indicating that Morningstar felt necessary improvements were being made.
One of the areas judged to be weak but with a positive outlook was the area of stability and profitability. Morningstar says that while Perennial had yet to break even, and would not do so before June 2004, it was on target due to good performance in some funds and recognition through industry awards. In May of this year IOOF was a finalist in the Money Management/Assirt Fund Manager of the Year Awards in the fixed interest category.
Morningstar also says that the group was likely to extend its early successes in areas such as fixed interest and cash across to Australian equities.
IOOF’s demutualisation plans were also viewed positively with the research house stating this would boost future growth plans. Senior management was also praised for its experience, and Morningstar pointed out that they had not worked together for any length of time.
The BMS rating makes up 25 per cent of IOOF’s star ratings and is half of the manager’s overall qualitative rating, the rest made up from a sector strength rating. The remainder of the manager’s star rating comes from risk-adjusted performance quantitative ratings.
At its last review of IOOF’s star rating in March, Morningstar gave the group an overall rating of four stars.
AUTHOR
Jason Spits
Recommended for you
Licensing regulation should prioritise consumer outcomes over institutional convenience, according to Assured Support, and the compliance firm has suggested an alternative framework to the “licensed and self-licensed” model.
The chair of the Platinum Capital listed investment company admits the vehicle “is at a crossroads” in its 31-year history, with both L1 Capital and Wilson Asset Management bidding to take over its investment management.
AMP has settled on two court proceedings: one class action which affected superannuation members and a second regarding insurer policies.
With a large group of advisers expecting to exit before the 2026 education deadline, an industry expert shares how these practices can best prepare themselves for sale to compete in a “buyer’s market”.
