Allan Gray has ousted Nedgroup Investments as the top manager of South African unit trust funds. However, Nedgroup Investments has retained its position as the top manager of offshore funds, according to the latest PlexCrown survey.
The last time Allan Gray was ranked number one was in the fourth quarter of 2013. It then slipped down the rankings, languishing in sixth position for two quarters. The company shot into second place in the third quarter of 2015 and was ranked third in the fourth quarter.
The PlexCrown survey, which is conducted quarterly, rates actively managed collective investment schemes and scheme managers based on their risk-adjusted returns.
The PlexCrown ratings take into account consistency of performance and the risk that a fund manager takes when investing, with managers scoring higher for good returns at low risk. Funds are rated from one to five PlexCrowns.
According to the survey for the quarter to the end of March this year, Allan Gray achieved a rating of 4.306 PlexCrowns, up from 3.514 in the fourth quarter of 2015.
Second-placed Nedgroup Investments dipped from 3.999 to 3.972 PlexCrowns, while third-placed Coronation Fund Managers saw its rating increase slightly from 3.628 to 3.640.
Nedgroup Investments was ranked the top manager of South African funds for the past two quarters and the leading manager of offshore funds for the past three. In January, it won the Raging Bull Awards for the best South African and the best offshore management company of 2015.
Five of Allan Gray’s eight funds that qualify to be included in the PlexCrown ratings achieved above-average ratings of four or more PlexCrowns. Three funds received five PlexCrowns: the Global Fund of Funds, classified in the global multi-asset high-equity sub-category, the Balanced Fund (South African multi-asset high equity) and the Stable Fund (South African multi-asset low equity).
Allan Gray’s Equity Fund (South African equity general) and its Bond Fund (South African interest-bearing variable term) received four PlexCrowns.
The Global Optimal Fund of Funds (global multi-asset low equity) received the lowest rating of one PlexCrown.
Eleven of Nedgroup Investments’s 19 qualifying funds achieved a rating of four or more PlexCrowns, with five funds achieving five PlexCrowns. They were: the Financials Fund (South African equity financial), the Private Wealth Equity Fund (South African equity general), the Entrepreneur Fund (South African equity mid- and small-cap), the Flexible Income Fund (South African multi-asset income) and the Stable Fund (South African multi-asset low equity).
The funds that achieved four PlexCrowns were the Global Equity Feeder Fund (global equity general), the Global Flexible Feeder Fund (global multi-asset flexible), the Mining & Resource Fund (South African equity resource), the Core Bond Fund (South African interest-bearing variable term), the Core Diversified Fund (South African multi-asset high equity), the Core Guarded Fund (South African multi-asset low equity) and the Bravata Worldwide Flexible Fund (worldwide multi-asset flexible).
Of Coronation’s 19 qualifying funds, 10 achieved above-average ratings. Four funds receive a rating of five PlexCrowns: the Industrial Fund (South African equity industrial), the Jibar Plus Fund (South African interest-bearing short term), the Bond Fund (South African interest-bearing variable term) and the Income Fund (South African multi-asset income).
Six funds achieved a rating of four PlexCrowns: the Global Managed (ZAR) Feeder Fund (global multi-asset high equity), the Global Capital Plus (ZAR) Fund (global multi-asset low equity), the Financial Fund (South African equity financial), the Balanced Defensive Fund (South African multi-asset low equity), the Property Equity Fund (South African real estate general) and the Optimum Growth Fund (worldwide multi-asset flexible).
Offshore funds
Nedgroup Investments achieved five PlexCrowns for the management of offshore funds approved by the Financial Services Board as suitable for South African retail investors. All three of the asset manager’s qualifying funds were awarded five PlexCrowns: the Global Cautious Fund and the Global Flexible Fund (both global asset allocation flexible funds) and the Global Equity Fund (global equity general).
ACPI retained its position as the second-best manager of offshore funds, with a rating of 4.500 PlexCrowns. Two of its five qualifying funds, the Balanced Ucits Fund (global asset allocation flexible) and the Rubrics Global Credit Ucits Fund (global fixed-interest bond), achieved five PlexCrowns. Two global fixed-interest funds, the Rubrics Global Fixed-income Ucits Fund and the Rubrics International Bond Ucits Fund, achieved four PlexCrowns.
Marriott, with a rating of 4.000 PlexCrowns, moved up the rankings to oust Oasis, which has been among the top three for a number of quarters, from third position. One of Marriott’s three qualifying funds, the International Growth Fund (global asset allocation flexible), achieved five PlexCrowns, while its First World Equity Fund (global equity general) achieved four PlexCrowns.
PLEXCROWN RATINGS OF MANAGEMENT COMPANIES TO MARCH 31, 2016
South African companies
1. Allan Gray: 4.306
2. Nedgroup Investments: 3.972
3. Coronation: 3.640
4. Marriott: 3.397
5. PSG: 3.311
6. Investec: 3.289
7. Prudential: 3.254
8. Sanlam Invest. Mngmt: 3.239
9. Absa: 3.221
10. Investment Solutions 3.084
11. Discovery: 3.053
12. Oasis: 3.047
13. Momentum: 2.848
14. Stanlib Multi-Manager: 2.804
15. Old Mutual: 2.717
15. Prescient: 2.662
16. Stanlib: 2.649
Offshore companies
1. Nedgroup Investments: 5.000
2. ACPI: 4.500
3. Marriott: 4.000
4. Oasis: 3.500
5. Investec: 3.375
6. Lloyds: 3.333
7. PineBridge: 3.125
8. Sarasin: 3.075
9. Coronation: 3.000
9. Orbis: 3.000
11. Stanlib: 2.756
12. Momentum: 2.750
13. PSG: 2.500
14. Sanlam: 2.375
15. Investment Solutions: 2.250
15. M&G: 2.250
17. Ashburton: 2.000
18. Franklin Templeton: 1.992
HOW THE PLEXCROWN RATING SYSTEM WORKS
The PlexCrown methodology to calculate the overall ratings of collective investment scheme management companies is based on applying weights to each of the four broad unit trust sectors.
The size of a fund relative to the combined size of all the rated funds in a company’s fold in a broad unit trust sector is also taken into account to determine the company’s rating in the sector.
To qualify for an overall rating, a company must have a rated fund in each of the broad unit trust sectors. In addition, it must have a rated fund in the South African equity general sub-category or an actively managed fund in the South African equity large-cap sub-category. A company with a rated fund in the worldwide category, but no rated fund in the global category, will not qualify for a global and worldwide rating or an overall management company rating.
Individual funds are rated over three and five years and are time-weighted, with the emphasis on the longer measurement period. Funds within a unit trust sub-category are ranked only if there are at least five funds in that sub-category with a track record of at least five years.
The methodology uses up to five risk measures to calculate risk-adjusted returns: total risk (Sharpe Ratio), downside risk (Sortino ratio and Omega risk/reward measure) and manager’s skill (Jensen’s Alpha and Treynor).
The methodology requires that the unit trust funds under evaluation are exposed to similar risks; therefore, the sub-categories for unclassified funds and money market funds are excluded.