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Smaller managers win big at Morningstar awards

Funds recognised for delivering the best risk-adjusted returns.

Boutique managers won in four of the seven fund categories at Morningstar’s annual unit trust awards held on Wednesday evening. They particularly dominated the awards for asset allocation funds, winning in three of the four categories.

The Morningstar fund awards recognise the unit trusts that have delivered the greatest out-performance on a risk-adjusted basis over the last five years. One, three, and five year figures are taken into account in calculating the winners.

The most notable winner was NFB Asset Management, which won in two categories. The NFB Ci Balanced Fund of Funds was named the top moderate allocation fund, while the NFB Ci Cautious Fund of Funds was the winner in the best cautious allocation fund category.

This recognition follows NFB receiving the Raging Bull award for the country’s top multi-asset equity fund on a risk-adjusted basis earlier this year.

Not only has NFB managed to deliver outstanding risk-adjusted returns through these portfolios, but has also done it at extremely low cost due to the inclusion of index-tracking strategies for some of its asset allocation. Both funds charge an annual fee of just 0.51%.

The award for the best flexible allocation fund went to the Centaur BCI Flexible Fund for the second consecutive year. Centaur also took the Raging Bull for the best flexible fund on a risk-adjusted basis earlier this year.

In the category for the best South African equity fund, the Mazi Capital Prime Equity Fund was named as the winner. This is the second time in three years that this portfolio has taken this honour.

Among the larger managers, the Coronation Bond Fund was a repeat winner in the best bond fund category, the Investec GSF Global Strategic Fund took the award for the the best global equity fund, and the PSG Balanced Fund was recognised as the best aggressive allocation fund for the second consecutive year.

The company awards given to asset managers who showed the best risk-adjusted performance across their range went to Allan Gray, for the best fund house with a smaller fund range, and Prudential, for the best fund house with a larger fund range.

Below is the full list of winners:

Best bond fund: Coronation Bond Fund

Best global equity fund: Investec GSF Global Strategic Fund

Best South African equity fund: Mazi Capital Prime Equity Fund

Best cautious allocation fund: NFB Ci Cautious Fund of Funds

Best flexible allocation fund: Centaur BCI Flexible Fund

Best moderate allocation fund: NFB Ci Balanced Fund of Funds

Best aggressive allocation fund: PSG Balanced Fund

Best fund house with a smaller fund range: Allan Gray

Best fund house with a larger fund range: Prudential Asset Management

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COMMENTS   6

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Another skcoking performance by big names like Allan Gray and the big four fund managers.

PS: Allan Gray: Its time to join the Randgold Minority Shareholders ”class action” against Investec and Randgold…its not to late – your rights don’t prescribe under the companies act (like all other debtors)at all.

Methinks KPMG will have to ”kiss and tell all” (their 13 years of non-compliance to publish compliant financials for JCI), to the SAICA appointed Ntsebeza Inquiry, as alsomalluded to by the Sunday Times and Business Day earlier last month.

Best fund house with a smaller fund range: Allan Gray

“Another skcoking performance by big names like Allan Gray”

Huh? What am I missing? No particular fan of AG but I do not see the shocking bit

Having followed Morningstar awards in a number of countries for many years I can tell you that they are great contrary indicator i.e. winning a Morningstar award has been the kiss-of-death for many a winner. Just look at Morningstar U.S. Equity Manager of the Decade Winner, Bruce Berkowitz of the Fairholme Fund. My point is don’t take these awards too seriously as while there is a robust basis and methodology for awards is may not align for you and your investment objectives and has a backward looking framework. Let the truth be told: The main purpose of these awards is publicity for Morningstar.

I am confused. You acknowledge “there is a robust basis and methodology for awards” but then you go on to say that awards are only a publicity stunt.

I agree with you that investors should not use awards to guide their investment decisions, but to have a good old dig at Morningstar in the process is maybe a bit unfair.

Having followed Morningstar awards in a number of countries for many years I can tell you that they are great contrary indicator i.e. winning a Morningstar award has been the kiss-of-death for many a winner. Just look at Morningstar U.S. Equity Manager of the Decade Winner, Bruce Berkowitz of the Fairholme Fund. My point is don’t take these awards too seriously as while there is a robust basis and methodology for awards is may not align for you and your investment objectives and has a backward looking framework. Let the truth be told: The main purpose of these awards is publicity for Morningstar.

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