Coronation and Allan Gray, the two leading managers of local collective investments, changed places, while PSG replaced Nedgroup in third position, in a survey that ranks management companies on their consistency of performance over the quarter to the end of September.
Allan Gray wrestled first place from Coronation, which had been the leading manager for the three previous quarters in the survey by PlexCrown Fund Ratings.
Eighteen managers of collective investment schemes qualified for an overall rating based on the PlexCrown ratings of their qualifying funds for the quarter to September 30. The PlexCrown ratings measure the risk-adjusted performance and the consistency of performance of funds for periods up to five years.
Fund ratings are also averaged to determine a manager’s strengths in various broad unit trust categories.
Allan Gray achieved an overall average rating of 4.528 PlexCrowns for the performance of its funds to the end of September, Ryk de Klerk, executive director of PlexCrown Fund Ratings, says.
Three of Allan Gray’s funds, the Allan Gray-Orbis Global Equity Feeder Fund, the Allan Gray-Orbis Global Fund of Funds and the Bond Fund, held first place in their sub-categories, while five (71 percent) of the investment house’s rated funds achieved above-average ratings of four or more PlexCrowns.
Four of Allan Gray’s seven funds achieved the highest rating of five PlexCrowns.
The investment house shared first place with Cadiz in the broad South African interest-bearing and income sub-category, and it shared the lead in the global and worldwide sub-category with Old Mutual and Regarding Capital Management.
Allan Gray was fifth in the South African multi-asset (non-income) sub-category and was joint-seventh in the South African equity and real estate sub-category with Kagiso.
Coronation had the second-highest domestic rating of 4.499 PlexCrowns for performance to the end of the September quarter, down from 4.657 in the June quarter.
De Klerk says Coronation’s lower overall rating was mainly a result of the lower ratings of the Equity Fund and the Balanced Plus Fund. They achieved ratings of five PlexCrowns in the second quarter and four PlexCrowns in the third quarter.
The amalgamation of the Absolute Fund with the Market Plus Fund and of the Coronation SA Capital Plus Fund with the Capital Plus Fund resulted in the delisting of the Absolute and the SA Capital Plus funds, but this had a minimal impact on Coronation’s overall rating, De Klerk says.
Coronation was the leader among its peers for its total South African rating, which is calculated across the three broad domestic categories: equity and real estate, interest-bearing and income, and multi-asset (excluding income).
It achieved the fifth-highest rating in the global and worldwide sub-category, with 4.376 PlexCrowns.
Four of Coronation’s funds, the Industrial Fund, the Strategic Income Fund, the Balanced Defensive Fund and the Property Equity Fund, were ranked first in their respective sub-categories.
Fourteen (or 82 percent) of Coronation’s 17 funds achieved above-average ratings, and six funds held a premium rating of five PlexCrowns.
PSG moved into third place in the management company rankings in the third quarter, with an overall rating of 4.058 PlexCrowns, compared with 3.698 in the second quarter. This was largely a result of the improvement of the ratings of the Alphen Equity Fund and the Konsult Creator Fund (a South African equity general fund), which each obtained five PlexCrowns, and the Konsult Moderate Fund of Funds (four PlexCrowns), De Klerk says.
PSG had the second-highest rating in the broad South African equity and real estate sub-category.
Nine (or 67 percent) of PSG’s 12 qualifying funds achieved above-average ratings and three funds achieved five PlexCrowns.
Boutique manager FirstGlobal was top among the companies whose funds are administered as third-party funds by a registered management company and that meet the requirements for an overall rating. The company achieved an overall rating of 3.229 PlexCrowns at the end of September.
Oasis achieved the top rating among the managers of funds domiciled outside of South Africa and registered with the Financial Services Board (FSB) as funds suitable for local investors.
Fifteen management companies competed for the position of leading offshore manager.
Oasis achieved an overall rating of 4.667 PlexCrowns for its four Dublin-based funds, and three of them earned five PlexCrowns each.
De Klerk says Oasis achieved the top spot in the global real estate general and the global fixed interest and other income sub-categories, and was joint-seventh in the global equity general sub-category.
Orbis, Allan Gray’s sister offshore company, achieved an overall rating of 4.000 PlexCrowns, giving it second position among the FSB-registered offshore managers.
One of Orbis’s four funds achieved the highest PlexCrown rating of five PlexCrowns.
Orbis came first in the Far East equity general sub-category, was joint-second in global equity general, and was joint-fourth in global fixed interest and other income.
Momentum and Alexander Forbes Strategic shared third place, with a rating of 3.750 PlexCrowns.
Momentum has three offshore funds, and two of them obtained four PlexCrowns each. Alexander Forbes has four offshore funds, one of which achieved five PlexCrowns.
HOW THE LEADING SA MANAGERS ARE CHOSEN
PlexCrown Fund Ratings assign each qualifying unit trust fund a score, or rating, based on its performance over four or five different measures of risk-adjusted performance over periods up to five years. These scores are used to determine the average scores of each manager in each unit trust sector, with the rating of an individual fund weighted according to the size of the fund.
The scores that a manager achieves in each unit trust sector are in turn used to determine an overall score for that manager in four broad categories: South African equity and real estate, South African interest-bearing multi-asset income, South African multi-asset (excluding multi-asset income), and global and worldwide.
An average rating for the management of funds that invest mostly in South Africa is determined using the average scores for the three South African categories.
To determine a manager’s overall rating, the averages for the four broad categories are combined according to the following weights: South African equity and real estate, 25 percent; South African interest-bearing and multi-asset income, 25 percent; South African multi-asset (excluding multi-asset income), 35 percent; and global and worldwide, 15 percent.