Winners revealed in the data

Finding the category and overall winners of the Fund Manager of the Year is no easy task and takes many hours of examining data, some of which stretches back over three years. Anthony Serhan details how ASSIRT sorts through the numbers to find the winners every year.

TheMoney ManagementFund Manager of the Year awards are an important event in the financial services calender and ASSIRT is proud to be involved with the continued development of this event.

In past years ASSIRT has utilised its powerful and extensive database of managed funds in Australia to discover those managers worthy of special mention. While those processes are again at work in 2001 we have introduced a strong qualitative element to the selection process.

ASSIRT Fund Ratings have been used for the first time in the award process and complement the existing quantitative nature of the awards. An ASSIRT Fund Rating is unique in the depth, breadth and content of its analysis and has consistently provided the investment community with reliable information on which to base investment analysis and decision-making. This development further increases the rigour of the award analysis.

While the ideas may be fairly straight forward building an algorithm to conduct the award analysis was a complex task involving many considerations.

The first decision undertaking by the analysis team was in determining the award asset classes. We have retained the six categories from last year which are shown below together with a description of which funds were allocated to each class:

Award Asset ClassesASSIRT Fund Categories

1 Multi Sector All Multi Sector (30, 50, 70, 70+)

2 Australian Shares All Australian Equity

3 International Shares All Global & Overseas Equity

4 Australian Fixed Interest Australian Fixed Interest only

5 Property Securities Property Securities only

6 Mortgages Mortgages only

In each of the categories we examined products from the three main tax structures: unit trusts, allocated pensions and unit trusts(???)For a manager to be considered in an award asset class they had to have at least one product rated by ASSIRT in that asset class.

Once a manager was eligible for an asset class all of their relevant products were considered in the analysis provided they had a three year performance history and, for non rated products, a minimum fund size of $10 million. Both retail and wholesale products were included.

For each manager in each asset class we then looked at three factors; the average ASSIRT Fund Rating, a size weighted one year performance and a size weighted three year information ratio.

One year performance reflects the annual nature of the award. A three year information ratio recognises a risk adjusted returns over a period that reflects the investors' minimum likely term of investment. The ASSIRT Fund Rating incorporates the qualitative, forward looking, assessment of the manager. Returns were calculated to 28 February 2001.

Weighting the performance factors by fund size ensures a manager's effort is going where their clients' money is placed.

The output from our analysis is a single number ranking each manager in each asset class. To discover the overall Fund Manager of the Year, we award points to the first five place getters in each asset class and amalgamate them.

Relatively more points are given for the first, than for second and third and few for fourth and fifth. An increased weighting is also given to the Multi Sector, Australian and International share categories. The overall winner must be a manager that has placed well in a number of asset categories.

ASSIRT congratulates the winners and finalists of 2001.

Anthony Serhan is an associate director at ASSIRT

Past Winners of the Fund Manager of the Year.

1999 Colonial First State

1998 Colonial First State

1997 Mercantile Mutual

1996 First State

1995 Bankers Trust

1994 Armstrong Jones

1993 Bankers Trust and FAI Life

1992 Bankers Trust

1991 NRMA

1990 Advance Asset Management

1989 Westpac

1988 Bankers Trust

1987 Elders Investment Management