Research house Morningstar has downgraded Colonial First State's (CFS) GDP-Plus strategy to hold saying it is "mired in uncertainty".
The downgrade comes just a week after its head of Australian equities Simon Shields defected to rival UBS and his deputy, Jim Taylor, migrated to BT Financial Group.
A third senior staffer, Justin Lannen, left CFS in February.
"The amount of money and the number of investors affected mean that the pressure is on CFS to choose suitable replacements for Shields and Taylor, and restore investors' faith," Morningstar said.
It added that the longer it takes CFS to appoint a permanent replacement for Shields the more team members are likely to be susceptible to poaching.
CFS chief executive David Dixon has stepped in as temporary head of Australian equities, and takes up portfolio management for the firm's imputation and Australian share strategies.
"Dixon has hands-on experience from his time at IAG Asset Management, so his appointment is a logical one, given Colonial First State's predicament," Morningstar said.
CFS's flagship wholesale imputation fund was sitting in the bottom quartile for the year ended 30 April 2007.
Dixon told InvestorDaily that he saw the recent staff departures as a positive. "It gives us the opportunity to reinvigorate our teams and bring in new blood. We want to constantly develop and enhance our teams. "
Morningstar said it was time for CFS to rebuild.
"There's no doubt Colonial First State has the determination and resources to re-build the strategy over time," the research house said.
"Existing investors should consider staying put in the short term, weighing carefully the potential tax implications of redemptions, until a clearer picture emerges."
