Research IP, the NZX-owned FundSource’s qualitative research partner, has completed reviews of about half-a-dozen managers, according to Darren Howlin, head of the Brisbane-based firm.
Howlin said Research IP, which trades as mfund Research in Australia, has embarked on a busy schedule of NZ manager reviews with a handful – including Salt Funds Management, Devon Funds Management, and Pathfinder – already finalised.
He said Research IP had also lined up meetings with a raft of managers this side of Christmas such as BT NZ, ASB, Mint Asset Management, Kingtide, ANZ and Quaystreet.
“We should have [qualitative reports] on 25 to 30 managers eventually,” Howlin said.
FundSource inked a deal with Research IP this October, months after the NZX-owned researcher abandoned its in-house qualitative local retail fund reporting function in favour of quant-only joint venture with the UK-headquarter FE (Financial Express).
Howlin said the Research IP reports would “engage with the market in a very different way” than traditional qualitative fund research documents.
He said the reports would follow a question-and-answer format, showing both the manager response and the Research IP evaluation (that may be further broken down to reveal individual input from the three underlying analysts).
“By posing questions as part of the report framework we tease out some pretty important information,” Howlin said. “Underpinning this approach is our aim to be clear, concise, efficient and objective.”
He said New Zealand fund managers have welcomed the arrival of Research IP in the country following the exit of a number of providers in recent years including van Eyk Research and Lonsec. At the same time, the remaining retail fund house, Morningstar, has scaled back its presence in New Zealand.
Meanwhile, Morningstar Australia released an inaugural ‘Prospects’ report last week, highlighting “promising investment strategies” not yet fully-rated by the research house.
The report lists 25 Australian and global funds – including some familiar names as well as more obscure managers – across a range of asset classes.
Grant Kennaway, Morningstar head of manager research Asia-Pacific, said no NZ funds made the Prospects list.
“We didn’t look at New Zealand managers in this edition,” Kennaway said. “But we may in the future.”
He said the decision to include funds in the Prospects report was a “qualitative judgment” based on the best ideas uncovered by the Morningstar research team.
According to the Morningstar report, ‘prospects’ must have “some or all” of the following features:
- unique strategy or process;
- existing strategy with new, possibly transformative, management;
- new strategy run by a manager with a long track record elsewhere;
- under-the-radar strategy that has an established track record but is not well-known.
“Every six months we will update our list of Prospects,” the report says. “Some strategies may “graduate” to full analyst coverage. Others won’t make the cut and could be dropped from the list of Prospects because their fundamentals deteriorate or there are material, negative changes.”
Kennaway said the frequency of the Prospects report could increase to quarterly if there was demand.
He said the feedback on the report to date had been “very positive”.