Research house Morningstar has downgraded the AMP Capital Investors Asian Growth fund to avoid.
The measure comes after the fund’s investment process underwent major changes, following the departure of AMP Capital head of Asian equities Karma Wilson in June.
“The departure of its former head of Asian equities in June 2011 was disruptive for AMP Capital, but this is as much a symptom as a cause of why we believe investors should avoid this strategy,” Morningstar fund analyst Tim Wong said.
“The firm’s ponderous actions in ratifying a shift to a more value-oriented process amid uncertainty over its direction and patchy quality of company analysis underpin our view that existing investors should also reconsider their investment.”
After Wilson’s departure, AMP Capital senior portfolio manager Jonathan Reoch stepped in as lead manager, alongside co-head and senior portfolio manager Ragu Sivanesarajah.
The two portfolio managers have shifted towards a more value-oriented process aligned more closely with their backgrounds.
“This makes sense. However, we’re puzzled by the firm’s slow efforts to confirm and implement this change – these were mainly approved in mid-August 2011,” Wong said.
He was only positive about the fund’s fee level.
“This offering is comparatively cheap, especially as a performance fee is unlikely to be charged in the near future, because of weak historical returns,” he said.
