Lonsec has regained the top spot in the first part of Money Management’s 2017 Rate the Raters survey, while new and smaller player SQM Research has earned a nod from fund managers for the first time, Oksana Patron finds.
Part one of Money Management’s 2017 Rate the Raters survey has seen Lonsec resume top spot after being unseated by Zenith last year. Fund managers who responded to Money Management’s survey with their views on the research houses reviewing their products, Lonsec outranked its peers in three out of six categories.
SQM Research, which is a relatively new entry in Money Management’ssurvey and much smaller than its well-established competitors, managed to win in two categories with clients appreciating both the rating process and feedback provided by the company.
SQM was originally launched in 2006 and was initially a property data business, but moved to fill the void left by the collapse of van Eyk, and in 2014 hired former van Eyk’s research head and chief investment officer, Robert de Silva.
SQM Research’s owner and founder, Louis Christopher, said: “I initially ran on the side while running a joint venture including van Eyk which started off at the same time which business was to rate the property funds management industry on behalf of van Eyk Research.”
“In 2010, SQM Research bought out that joint venture and the ratings research team all moved over to SQM Research. At the same time SQM started expanding its ratings coverage into other asset classes.”
The company says its target market is now financial advisers who seek active fund managers as part of their APL and also require Australian Tax office (ATO-compliant property valuations for their clients.
The 2017 survey found that the overall usage ranking of the research houses had not drastically changed from last year with Lonsec and Zenith again the most popular firms for fund managers to turn to for their product reviews.
This year Lonsec was selected by 98 per cent of the survey’s respondents, which represented a slight increase from 97 per cent last year, and pushed down its rival and last year’s winner, Zenith, to second position.
Zenith saw a large drop in the number of managers, who participated in Money Management’s survey and had their products rated or reviewed by Zenith over the past 12 months, with only 83 per cent of respondents this year saying they had used the firm for product ratings. This compared to 99 per cent of fund managers who chose Zenith last year.
While Morningstar managed to maintain third place, the firm experienced a slight drop from 76 per cent to approximately 70 per cent of respondents this year who stated they had decided to have their products rated by the firm.
While Mercer again landed in fourth place, it saw a slight increase of two percentage points to 47 per cent counting year-on-year in the number of respondents who said they had used the firm to rate their products in the last 12 months.
SQM Research was included in the Money Management survey for the second time this year, and closed the ranking for this category. Only 26 per cent of respondents admitted they had chosen the firm to value their products. By comparison, SQM
Research attracted over one-third of all the fund managers in 2016 to use its services.