The ratings agency said the retirement of lead manager Joanne Warner and the departure of portfolio manager Mark Hume, had “lessened the appeal” of the team managing the First State Global Resources and First State Global Resources (Ire) funds.
Warner relinquished responsibility for the funds on 1 July and will retire at the end of next month. She joined the team when the desk was formed in 1997, before becoming lead manager in December 2006 and head of the global resources team in 2010.
Hume meanwhile, left in June. He specialised in energy while at the funds and held a portfolio management position.
In an analyst report, Fatima Khizou, manager research analyst at Morningstar, said Warner brought “significant expertise to the management of these funds” and “provided investors with a high degree of stability”.
“These material changes have lessened the appeal of this team and overall strategy relative to some of its peers and we have therefore lowered our conviction,” she added.
Portfolio manager Todd Warren has been appointed head of the global resources team. He will share team leadership and portfolio management responsibilities with senior portfolio manager Tal Lomnitzer, who joined the desk in 2011.
Morningstar noted this new leadership team will be supported by three analysts with diverse backgrounds and that the investment process will remain unchanged, focusing on firms with high-quality reserves and at the cost curve’s lower end.
Khizou noted that returns under Warner to the end of May 2017 were firmly ahead of the Sector Equity Natural Resources Morningstar Category average.
However, she added: “Relative to the fund’s benchmark – a composite of mining and energy – results were lacklustre. Indeed, the fund failed to outperform the index over one, three, five, and 10-year periods (to May 31).”
