Tower Managed Fundsnow shares the same status asTyndallas a one star fund manager, afterMorningstarannounced a downgrade yesterday.
Tower now has the status of a “very poor quality” fund manager in Morningstar’s opinion.
Morningstar says it found that the fund manager had a combination of very low quality ratings and average and below quant ratings.
Features highlighted in Morningstar’s announcement of the downgrade focus on a perceived negative trend rating of its corporate strength, admin and distribution capabilities, investment management, Australian listed property sector strengths, while its international equities sector strength was graded neutral to negative.
Meanwhile, Australian fixed interest, Australian equities, Unit trusts, and Superannuation funds were ranked as having a neutral impact.
But it wasn’t all bad news for Tower, with Australian direct property flagged as very positive, while wholesale unit trusts were also graded in the league of the positive.
Morningstar says that despite Tower being still engaged in a Group-wide restructuring that was begun in May 2000, “significant marketing, distribution and repositioning is needed to achieve clarity in the strategic direction of the funds management business in Australia”.
Likewise, Morningstar says Tower needs to do considerable work to improve its distribution strategy, and that Tower “is very poor in the provision of accurate and timely funds data to Morningstar — well below industry best practice”.
Morningstar also remained unimpressed by the reblooding of the investment management team, which was depleted by the resignation of a quantitative strategist and four key equities staff in November 1999 and January 2000 respectivley.
“The team is relatively new, and portfolio management experience of some staff in their assigned role is untested — lacking depth in specialisation relative to the market,” Morningstar’s report reads.
