Rising stars – how we rated them
TheRising Star award recognises new and emerging managers.
Funds across all traditional sectors were considered, subject to satisfyingallof the following criteria:
1. Funds within the sector were launched for the first time in the last five years. This includes established global managers that have launched domestic equity capabilities in the past five years;
2. The performance record of the fund was more than one year but less than or equal to five;
3. Locally sourced funds under management of the manager in the sector were less than $5 billion as at end December 2002; and
4. Funds have been rated as investment grade byAssirt.
Hedge funds were not considered in the rising star category because they have been considered in the alternative assets award category.
By nature, rising stars have limited performance track records. As such, the scoring process had more of a forward-looking focus and placed greater emphasis on qualitative ratings.
The winners were determined in the followin way:
• 60 per cent was made up of the average Assirt rating score (ARS) of a manager’s products within each of the relevant asset classes; and
• 40 per cent was made up of the size weighted one-year performance (SWP) of eligible funds relative to their respective benchmarks.
As many of the managers in this category had little over one year’s performance history, it was not possible to make meaningful and consistent comparisons of past risk or information ratios. In assessing one-year performance, returns were measured relative to funds’ respective benchmarks.
Each of the three factors were converted to a standardised score before applying the weightings to generate an overall asset class score.
The standardised score for each factor was calculated as: (Result — Average Manager Result) / Standard Deviation of manager results.
Steve Gamarov is head of investment solutions and quantitativeresearch at Assirt
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