Funds
Australian Equities Sector Wrap 2020
Morningstar Medallists are the outstanding Australian equities fund manager strategies for 2019.
Executive summary
Morningstar conducted qualitative research assessments on 89 Australian large-cap equities strategies and 36 Australian small-cap strategies during its 2019 fund manager reviews. The 125 Australian equity strategies covered by Morningstar included 99 unlisted trusts, 17 exchange-traded funds, and nine listed investment companies. The 
Australian Equities Sector Wrap provides both a summary of the Morningstar Analyst Ratings and an overview of our major observations. This was the last annual review under the current rating system; the next review will be under Morningstar's enhanced ratings system, which was introduced on 31 Oct 2019.
After completion of the Australian equities fund manager annual reviews, four unlisted funds achieved rating upgrades owing to our increased conviction in the investment team, research capability, and investment process. We downgraded 13 unlisted funds and listed investment companies based on a mixture of investment-team upheaval, reduced confidence in the portfolio manager, or diminished conviction in the investment process or structure.
Morningstar’s manager research analysts are the primary decision-makers in determining the strategies for which we will produce qualitative research ratings and reports. We look for the best strategies in the market for our clients, basing our decision on investment merit and demand. Positively, we initiated coverage of four unlisted funds in the last annual review cycle.
Morningstar Medallists are the outstanding Australian equities fund manager strategies for 2019, being awarded a Morningstar Analyst Rating of Gold, Silver, or Bronze. In 2019, 66% of Australian equity fund managers reviewed by Morningstar achieved a Medallist rating.
We assess how the large-cap active managers have fared, during the buoyant market of 2019 and distressed market of early 2020, in the continuing struggle for dominance between active and passive managers.
We also examine the liquidity in small-cap stocks, analysing portfolio days-to-trade for the active managers in Morningstar's coverage universe.
We conclude with our usual overview of the Basic Data, Portfolio Characteristics, and Style Box breakdowns.
