Big shake up of FE Alpha Managers in 2017 rebalance

By Corporate

  • UK managers lead the pack - 34% of IA UK Smaller Companies Funds run by FE Alpha Managers

  • 56 new Alpha Managers awarded, 40 of which have never previously made the list

  • 38 managers lose their FE Alpha status

  • Schroders and Fidelity International top the board on group level

There has been a big churn of talent in the 2017 FE Alpha Managers rebalance with the emergence of 56 new Alpha Managers and a cull of 38 managers that previously held the highly coveted status. 

UK Smaller Companies managers have emerged as 2017 leaders with 34% of IA UK Smaller Companies Funds run by FE Alpha Managers.  Similarly, managers with funds in the IA UK Equity Income and UK All Companies sectors are also well represented this year with 20% and 19% making the list respectively. 

Mika-John Southworth, director at UK ratings and research agency FE, said: “In the immediate aftermath of Brexit, many UK small- and mid-cap managers took a hit to performance, but in the UK Smaller Companies sector in particular, investors that held their nerve have been rewarded with a swift recovery.

“Over half of this year’s top 20 ranked FE Alpha Managers are running UK Small Cap or All Companies Funds.  Indeed, on average, IA UK Smaller Companies managers have returned 40% more than the FTSE All Share over five years.  FE’s Alpha Manager Awards set a benchmark for active management and UK Smaller Companies is just one sector where active managers are more than justifying their fees and delivering value against the benchmark over the longer term."

Top Groups & Managers

193 managers have scooped an Alpha rating this year in the annual rebalance.  Schroders and Fidelity International have topped the leader board, with the two groups boasting ten and nine managers respectively, who have been awarded the highly coveted Alpha Manager status. Jupiter and JO Hambro are not far behind with seven managers each.

Top 2017 FE Alpha Managers by Group

Fund Manager

Number of 2017 Alpha Managers

Schroders

10

Fidelity International

9

JO Hambro Capital Management

7

Jupiter Asset Management

7

Allianz Global Investors

6

Blackrock

6

MFS

5

Invesco Perpetual

5

Henderson Global Investors

5

GAM

5

First State Investments

5

Of the 56 new entrants this year, 40 have previously never been awarded an Alpha rating – the list includes (top 5 listed here in alphabetical order) Beverley Jane Davis of HSBC, James Hanbury of Odey, Nick Martin or Polar Capital, Colm McDonagh of BNY and Schroders’ Michael Scott.

FE will announce its Hall of Fame Managers and the nominees for the FE Alpha Manager awards in May ahead of the ceremony. Hall of Fame Managers are those who have consecutively been awarded an Alpha rating for seven years.

Managers that have lost their rating

This year also saw a considerable shake-up of previous Alpha Managers with 38 being taken off the list: notable names (by assets under management) include Carmignac Gestion’s Edouard Carmignac, Blackrock’s Scott Thiel, Nigel Thomas of Axa, Henderson’s John Bennett and Nick Price of Fidelity. 

One of last year’s Alpha Manager chart toppers, Henderson, has this year seen its number of Alpha mangers halve from 10 to five.

About the Alpha Managers

Each year ratings and research firm FE, recognises the top 10 per cent of UK retail-facing managers on their track records going back to 2000, with extra weighting for managers with the longest track records to highlight the benefits of experience. To determine the ratings, FE looks at a manager’s ability to create risk-adjusted alpha, outperformance in both rising and falling markets, and those who consistently beat their benchmarks.

Mika-John Southworth, director at FE, said: “These ratings are a quant-driven marker to help advisers and investors spot the best managers in the UK retail investment market.

“The ratings assess performance throughout a manager’s entire career, across all the funds they have managed, and are specifically designed to reward skill, consistency, alpha generation and downside protection.

“The purpose of the Alpha Manager rating is to take a step back and remove short-term market movements or cyclical factors from the analysis. It allows us to identify the managers who can add value over time – which is fundamental considering the market conditions we have been facing over the past year."

 

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