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Rating:M* Explains Subtle Dance Between PM Changes and Fund Ratings Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, May 24, 2013

M* Explains Subtle Dance Between PM Changes and Fund Ratings

News summary by MFWire's editors

It's a source of exasperation for all investors: committing to a fund only to find out that a PM is leaving.

How to you respond to it? And why do some of these changes lead to ratings changes, while others don't?

Morningstar set out to explain some of the analytical thought processes the firm uses on this subject.

To illustrate these thinking process, senior mutual fund analyst Dan Culloton used three examples.

The first was the Loomis Sayles Bond fund, which lost co-manager Kathleen Gaffney to Eaton Vance last fall, but still kept its Gold Morningstar Analyst Rating because the fund's other co-managers Elaine Stokes and Matt Eagan, as well as its analyst team, remained and are good.

The second example is the planned departure of Rikard Ekstrand by the end of this year. Culloton notes that this is the second major management team adjustment since 2010. Moringstar is waiting and watching.

The final example is the T. Rowe Price New America Growth, which saw the surprise departure of Joe Milano and his replacement by Dan Martino. The fund's Gold analyst rating has been dropped to Neutral until Martino can prove his way.

Read more in Morningstar.  

Edited by: Tommy Fernandez


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