Crown ratings – fortune favours the fortunately-diversified

AMP Limited IPAC Asset Management Zurich Financial Services Resolution Capital colonial first state CFS pengana capital Colonial first state global asset management CFSGAM australian unity

11 September 2019
| By Mike |
image
image
expand image

Strategic stock selection combined with appropriate diversification and a modicum of luck represented the keys for the fund managers who emerged best in the latest quantitative FE/Fundinfo Crown Ratings rebalance covering the past six months.

While much could be said for index-hugging over the period, the fund managers who were most rewarded were those with strategies which best accommodated the ongoing volatility.

FE/Fundinfo Crown Ratings are a quantitative rating determined using FE’s performance scorecard process which analyses a fund’s performance over the last three years. The score is made up of three components – alpha, relative volatility, and consistently good performance. 

Three asset management firms saw significant upgrades to their funds over the period - AMP Limited’s IPAC Asset Management, Zurich Financial Services and Resolution Capital.

On the downside, market conditions did not suit the strategies of six of the managers over the period.

Morningstar Investment Management Australia, IOOF Investment Management, Colonial First State (CFS), Pengana Capital, Colonial First State Global Asset Management (CFS GAM), and Australian Unity emerged as having the most five Crown downgrades.

The manager that lost the most five Crown ratings was Morningstar at seven funds, followed by IOOF at five, CFS at four, and Pengana, CFS GAM, and Australian Unity all at three.

However, as CFS general manager for investments, Scott Tully pointed out, it was very much a case of whether the underlying strategies of the funds had been suited to the prevailing conditions.

Tully pointed to the performance of the CFS Multi-Index Balanced and Multi-Index Moderate Funds and acknowledged that their tilt to value had resulted in performance lagging global indices at a time when US technology stocks had been particularly strong.

He pointed out that, at the same time, the funds had remained overweight to emerging markets in the expectation of relatively stronger returns in the future.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Interesting. Would be good to know the details of the StrategyOne deal....

3 days 22 hours ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 1 day ago

increased professionalism within the industry - shouldn't that say, FAR register almost halving in the last 24 months he...

4 weeks 1 day ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

2 weeks 3 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

2 days 20 hours ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

1 day 23 hours ago