AMP | OBSERVATIONS, page-59

My turn now

AMP Capital has had two multi-sector funds downgraded from neutral to negative by Morningstar, with the research house citing staff turnover as the reason for the downgrades.

The AMP Capital Core Retirement Fund and AMP Capital Multi-Asset fund were downgraded in Morningstar's latest multi-sector wrap.

A downgrade to negative means the research house is suggesting investors avoid these funds altogether.

"We downgraded AMP Capital Core Retirement Fund to negative. After a tumultuous period for the multi-asset team behind AMP Capital Core Retirement, we believe it is time investors looked at other flexible asset-allocation options," Morningstar said.

"This group has experienced continued staff turnover in the past three years. It has seen not only senior titles like the chief investment officer and head of sector multimanager leave in quick succession recently but also several exits amongst the analyst ranks."

Morningstar went on to say that with AMP Capital separating from AMP Australia there is "unresolved disruption".

"Managing a flexible asset-allocation strategy is difficult in the most stable environments, but with the team's unrest, we think this puts the process at a distinct disadvantage, too. Putting all this together, the investment case has deteriorated significantly, and we suggest investors best avoid," the research house advised.

Similarly, Morningstar cited the loss of chief investment officer, sector multimanager and wider staff turnover as its reason for downgrading all three of the AMP Capital Multi-Asset Fund's share classes to negative.

"Owing to a continually unsettled team and corporate backdrop, we consider AMP Capital Multi-Asset a subpar flexible asset-allocation strategy," Morningstar said.

"All things considered, we believe the task of managing this flexible strategy is too big and suggest investors look elsewhere."

In August, the AMP Capital team lost its head of sector multi-manager Lydia Kav (nee Serafim) after 25 years with AMP.

In May, multi-manager chief investment officer Debbie Alliston announced her resignation. She was replaced by former chief investment officer of Equip and Catholic Super Anna Shelley.

Also in August, AMP Capital lost its head of portfolio management for the multi-asset group Darren Beesley