Morningstar Awards overall winners
Despite local and foreign equities making losses over the past year, some fund managers prevailed
The past year was one of the worst on record, with local and foreign equities making losses, and property failing to repeat its usual outperformance. It is not too surprising that there has been some turnover in the winning managers of the Morningstar Fund Awards, with nearly half of the marks given for 2018 itself. Past winner Prudential was not in the top three houses this year. And as a house with a single view, there was some slippage across the board.
The same cannot be said for this year’s winner, Nedgroup Collective Investments, which operates a
“best of breed” model, outsourcing each fund to a specialist manager.
MD Nic Andrew says though its largest equity fund Rainmaker, run by Abax, was below average, and the Value and Stable funds outsourced to Foord have experienced challenges, it was a good year for the Growth Fund run by Electus and the Managed Fund run by Truffle. It was also a strong year for its low-risk Flexible Income Fund as well as its low-risk core range. The global funds also contributed, run by an eclectic group of boutique managers: Veritas, First Pacific Advisers, Chartwell and Resolution.
Nedgroup has an impressive track record of helping to build up sizeable asset managers such as the R80bn-plus Abax and the R150bn Taquanta, and it has also acted in effect as the main retail distribution channel for Foord
Asset Management.
What it means:
PSG is the only house to keep the same position as last year. It has become stronger over the past five years under chief investment officer (CIO) Greg Hopkins and CEO Anet Ahern. Ahern was previously head of BOE, Quaystone and Sanlam Multimanager but has Domestic funds faced challenges over the past year, but Nedgroup was buoyant enough to bag the top industry award never run a better oiled machine.
Last time it was PSG’S Stable and Balanced funds which propelled it to the top echelons, this year the PSG Flexible Fund was nominated. The fund used to be run by Jannie Mouton, son of the PSG founder. Though Mouton has moved on, the methodology remains. It has proved to add value through its simple asset allocation process: if it can’t find attractive shares to buy, it hoards cash — which it releases when it finds opportunities. But it still has strong products in the Equity, Stable and Balanced space with one subpar performer in its Global Flexible Fund.
Investec was a regular winner in the early 2000s when these were known as the Micropal Awards. It is now in third place in a year in which its archrivals Coronation and Allan Gray are nowhere. Investec has so much product that it is not too surprising that at least one of its funds pops up on the fund award tables. Last year it had the top global equity fund. Global Strategic Equity; this year the Global Franchise Fund is runner-up in the same category. Investec Asset Management deputy MD Sangeeth Sewnath says the flagship Investec Opportunity Fund achieved a positive return for the past year and the Diversified Income Fund gave more than 9%, and both the Equity and Value funds were above average. And internationally its Strategic Managed and Multi-asset Income funds did well.
It will be unusual for all the funds run by Investec to be performing at the same time as it is, like Schroders, a multispecialist house. But it has been in a sweet spot. The smaller house award is given to those with between three and nine eligible funds. It is confusing as Allan Gray, which is one of the three largest collective investment businesses, is considered “small” with less than 10 funds. Since there are no separate “offshore” awards, most of the international houses are in this category. Last year Pinebridge and
San Francisco-based Dodge & Cox — both large managers by SA standards, were runners-up.
This year the winners closely reflected the universe of SA’S small or boutique managers. The winner, NFB, made a big impact last year, winning both the cautious allocation and moderate allocation categories. This year, NFB Managed