Morningstar has stopped covering the almost $29 million Fisher Funds International Growth Fund as part of its regular cull of irrelevant, poor-performing or unloved products.
The Fisher global fund was the only NZ product cut by Morningstar during a new year clean-out that also saw the research house remove a number of big-name manager funds from its Australasian shelves.
While the Fisher fund was dumped early in January, in a release last week Morningstar removed seven Australian-based funds from its qualitative research roster including the BlackRock WS Australian share fund and PIMCO’s Unconstrained Bond product.
In boiler-plate phrasing contained in the new ‘Analyst Notes’ style, Morningstar says it drops qualitative coverage of particular funds “in order to reallocate our analysts to research other strategies”.
Chris Douglas, Morningstar head of research ratings Asia-Pacific, said the company typically turns over coverage of about 15-20 per cent of products in its database.
“There are many reasons why we cut funds,” Douglas said. “For some, it’s because they haven’t attracted a lot of assets and people aren’t interested in using them.
“At other times, we don’t think the product is that good, and we never have. We can’t cover all funds.”
However, he said larger funds typically remain on the Morningstar radar regardless of investment merit, given the level of investor interest.
Douglas said the Fisher global fund fell out of its purview mainly due to lack of client demand.
“Fisher wasn’t really marketing the fund to NZ financial advisers, which is our main clientbase there, so there wasn’t a lot of overlap,” he said. “The fund hasn’t attracted a lot of money in a market that seems to reward a small group of global equity managers.”
In its final research report, Morningtar says while the Fisher global fund had potential it suffered from a small and unstable research team.
“All told, this fund has some attractive features, but also some drawbacks, meaning we are not able to provide further endorsement,” the report says.
However, Fisher uses the global shares strategy for its in-house products including the group’s two KiwiSaver schemes.
Douglas said the recently-implemented ‘Analyst Notes’ system, which allows researchers to update existing fund reports via amendments rather than rewrite entire documents, has increased the speed and transparency of the process.
“Since we started it in Australia and New Zealand on November 30 last year we’ve issued 27 Analyst Notes,” he said.