"A disciplined process and experienced oversight make Perpetual Ethical SRI an investable option, but the portfolio management change has caused our conviction in the strategy to wane," Morningstar analyst Tom Whitelaw said in a report.
Nathan Parkin has taken over as portfolio manager following Perpetual's announcement in July that former lead investor Simon Bridger would leave the company.
Although Parkin's inexperience as a portfolio manager was the main driver of the downgrade, he also cited large sector skews as a result of the fund's ethical tilt, riskier profile as a result of its leaning towards small to mid-cap stocks, and higher-than-average fees.
