How top firms gained the edge


PF Feb2 0303b IOL

Greg da Silva

The two runners up for the Raging Bull Management Company of the Year were Allan Gray, represented here by Jeanette Marais, and Nedgroup Investments, whose John Karis collected the certificate.

Top risk-adjusted returns from its foreign funds boosted good results from its domestic funds to give Coronation the edge over its peers in the PlexCrown Ratings management company rankings.

But the company has strong competition, particularly from the runners-up in the management company rankings, Allan Gray and Nedgroup, which both achieved better average risk-adjusted ratings for the management of funds that invest in domestic markets than Coronation.

The top-performing management company of the year is determined by averaging the manager’s individual fund ratings in various broad unit trust sectors. These averages are used to determine an average score for the management of funds that invest in domestic markets and another for the management of foreign funds.

The winning manager has the highest average when these two scores are combined, with a weight of 75 percent to the average domestic rating.

Coronation achieved an average overall score of 3.938 PlexCrowns, while Allan Gray achieved 3.875 and Nedgroup 3.729.

Coronation achieved fourth position among its peers when ranked on its average PlexCrown ratings for funds that invest in domestic markets. It was beaten by BJM, which was first among its peers, Allan Gray in second place and Nedgroup in third place.

Coronation has 15 funds that qualify for PlexCrown ratings. Six of these funds, including four that invest in domestic markets, achieved the highest rating of five PlexCrowns.

Coronation’s four top-performing domestic funds were its Balanced Defensive Fund, which also won the award as the top-performing asset allocation prudential fund on the basis of its risk-adjusted returns over the past five years, the Industrial Fund, which won the certificate as the top-performing industrial fund over three years, the Balanced Plus Fund and the Equity Fund

One of Coronation’s three funds that scored a four-PlexCrown rating, the Coronation Property Equity Fund, won the certificate for the top-performing real estate fund over three years at this week’s Raging Bulls award ceremony.

The rest of Coronation’s domestic unit trust funds achieved three PlexCrowns each.

As a result of these, Coronation achieved second place in domestic real estate, joint sixth place in domestic equity and joint eighth place in both the domestic asset allocation and domestic fixed interest categories.

Coronation’s top ranking for foreign fund management was thanks to two funds that achieved five PlexCrowns each: the Coronation World Equity [ZAR] Fund of Funds, which won the certificate as the top-performing foreign general equity fund on risk-adjusted returns over five years, and the Coronation Global Emerging Markets Flexible [ZAR] Fund.

Coronation was placed first in the foreign equity sector and joint fourth in foreign and worldwide flexible sector.

Allan Gray, which has won the Raging Bull Award for the Top Management Company four years in a row since 2009, achieved second place in this year’s management company rankings.

The manager has six funds that qualify for PlexCrown Ratings. One of these, the Allan Gray Balanced Fund, achieved the top rating of five PlexCrowns for its performance on a risk-adjusted basis over five years.

Three other funds achieved a rating of four PlexCrowns each, and the manager’s other two funds scored three PlexCrowns each.

Relative to its peers, Allan Gray was placed in second position for the management of funds that invest in domestic markets.

It achieved joint second spot in domestic fixed interest, joint sixth in domestic equity and joint ninth in domestic asset allocation.

The investment house achieved joint third position among its peers for the management of funds that invest in foreign markets.

Allan Gray is a valuation-based manager that invests in securities when they are trading below their intrinsic value and sells when the shares are at fair value. The manager runs only a few focused portfolios.

Ryk de Klerk, managing director of PlexCrown Fund Ratings, says that during the final quarter of 2012, Nedgroup Investments significantly closed the gap between itself and the two front-runners to take third spot overall.

Nedgroup Investments’ Stable Fund (asset allocation prudential low equity) achieved a long enough track record and qualified for a rating this past quarter for the first time. Its top rating of five PlexCrowns gave the manager’s overall score a boost.

Nedgroup Investments has 14 unit trust funds that qualify for PlexCrown Ratings.

In addition to the Stable Fund, three of Nedgroup’s other funds achieved the top rating of five PlexCrowns each: the Value Fund, the Financials Fund and the Mining & Resources Fund.

The Financials Fund, the Mining & Resources Fund and the Entrepreneur (smaller companies sub-category) each won certificates for their performance over three years to the end of December last year.

Four of Nedgroup’s funds achieved four PlexCrowns each and the rest achieved either three or two PlexCrowns each.

Nedgroup was joint second out of 15 investment houses in the domestic fixed interest sector, joint sixth in domestic equity out of 45 houses, and joint 20th in domestic asset allocation out of 72 houses.

Nedgroup Investments’ overall rating was somewhat diluted by its ninth position in the ranks on the management of foreign funds.


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