Nineteen funds have seen huge improvements in their FE Crown Fund Rating scores since they were last rebalanced in July 2012. In the latest set of results 12 funds climbed the rankings from one to four FE Crowns, while 14 funds rose from two to five FE Crowns.
The biggest leap from one to five FE Crowns was achieved by five funds:
- JP Morgan Multi Manager Growth
- EFA Clarion Explorer Portfolio Return
- Sentinel Enterprise Portfolio
- Henderson UK Property
- CF Ruffer Pacific
CF Ruffer Pacific saw the most dramatic improvement, delivering the highest alpha of all funds in the Specialist sector. Henderson UK Property generated much improved outperformance with significantly lower volatility.
Funds were judged according to their three year track records to 31 December 2012 and ranked according to alpha generation, volatility and the consistency with which they have beaten their benchmarks. The top 10% of funds were awarded five FE Crowns and the > following 15% received four FE Crowns.
Seven funds achieved the top rank of five FE Crowns in their first rating (funds must have a three year track record to be rated):
- Henderson European Special Situations
- CIS Sustainable Diversified
- Newton Managed Income
- CIS Sustainable World Trust
- Santander Investment Income Portfolio
- Evenlode Income
- Santander Sterling Government Bond
The three mixed investment strategies – CIS Sustainable Diversified, Newton Managed Income and CIS Sustainable World Trust – as well as Santander Sterling Government Bond scored particularly highly for their ability to deliver alpha and beat their benchmarks.
Evenlode Income kept volatility low compared to peers in the UK Equity Income sector, while Santander Sterling Government Bond was one of the most consistent performers within the UK Gilt sector.
Tim Wilson who runs Newton Managed Income, Mike Fox at the helm of CIS Sustainable World Trust and Richard Pease, manager of the Henderson European Special Situations Fund, are FE Alpha Managers – recognized as being within the top 10% of the UK’s fund managers.
Rob Gleeson, Head of FE Research, said: “The current rebalancing saw, as expected, an above average movement in the FE Crown Fund Ratings scores, with several funds seeing big improvements or significant downgrades. The undulation of recent years, with a post credit crunch rally followed by another correction in 2011 and the strong performance last year, has made it a difficult environment for funds; with both aggressive and defensive strategies doing well at various times over the last three years. The movement in the ratings this time round show the re-emergence of growth strategies as the dominant source of returns.”
FE Crown Fund Ratings are quantitative ratings ranging from one to five designed to help investors identify funds which have displayed superior performance in terms of stock picking, consistency and risk control. FE Crown Fund Ratings apply to all the main FE universes including unit trusts and OEICs, investment trusts, life funds, pension funds and offshore funds. The scores are rebalanced half yearly using three-year total returns.