Subscribe to Email Updates

Recent Posts

BlackRock & Liontrust top FE's latest Crown Ratings rebalance

By Corporate

Updated on Monday, 29 July, 2019

  • Sterling Strategic bonds and North American Smaller Companies among leading sectors with highest percent of 5-Crown funds.

LONDON, 29 JULY 2019: FE’s latest bi-annual Crown Fund Ratings rebalance has awarded 366 funds with the highly-prized 5 FE Crowns which is an 8.93% increase from last year. Of these funds, 7 are newcomers, which is less than half the number of newcomers compared to last year, and 37 have jumped 3 or more FE crowns to achieve the top accolade.

The Sterling Strategic Bonds sector has significantly increased its number of 5 crown rated funds since last year and has topped the sector charts with 32.1% of its funds achieving a 5-crown rating. This is followed by the North American Smaller Companies sector (21.4%), UK smaller companies (18.8%) and Volatility Managed (18.4%).

Charles Younes, Research Manager at FE, comments: “Over the last three years, bond markets went through an entire cycle. Strategic bond managers benefitted from their flexibility to invest across the fixed income spectrum. As a result, strategic bond managers generated returns with less volatility, and more compelling risk-adjusted returns.”

There were a number of fund sectors that failed to achieve any 5 Crown-rated funds: IA European Smaller Companies, IA Global Equity Income, IA Japanese Smaller Companies, IA Short Term Money Market, IA Standard Money Market and IA UK Equity & Bond Income.

Sectors

Sector

No. of Funds

No. of 5 Crown Funds

% of 5 Crown funds

Sterling Strategic Bond

81

26

32.1%

North American Smaller Companies

14

3

21.4%

UK Smaller Companies

48

9

18.8%

Volatility Managed

98

18

18.4%

Mixed Investment 40-85% Shares

146

25

17.1%

Asia Pacific Excluding Japan

95

15

15.8%

UK All Companies

213

33

15.5%

Asia Pacific Including Japan

7

1

14.3%

Specialist

206

27

13.1%

Global Emerging Markets

93

12

12.9%


New entrants

Funds must have three years of history to qualify for a FE Crown rating.  At this rebalance, 7 previously unrated funds have achieved the highest ranking of 5 FE Crowns. Among these are AXA World Funds, Framlington UK, BlackRock Sterling Strategic Bond and Unicorn UK Ethical Income.

Amy Kennedy, Fund Analyst at FE, comments: “Having recently reached its three-year mark, Unicorn UK Ethical Income, like the unconstrained version, has benefitted from excellent stock selection by the team despite the headwinds that UK smaller companies have faced since 2016.”

The Liontrust UK Micro Cap Fund is a newly-rated fund and is starting with a 5-crown rating. It’s also the only newly 5-crown rated fund to be on the FE Invest approved list.

Kennedy, comments: “As the fund reached its three-year mark, the team at Liontrust continue to demonstrate their excellent ability to select stocks despite the headwinds UK smaller-caps have faced since 2016. The team’s preference for technology companies as well as their growth style has helped too as both have been in favour over recent years”

Groups
Looking at the groups with the most 5 crown rated funds in this latest rebalance, Blackrock is one of the biggest winners moving up from 8th to 1st place since January’s rebalance.

Tanvi Kandlur, Senior Fund Analyst at FE, comments: “Many of BlackRock’s funds have seen upgrades at this rebalance reflecting the strong performance across the wide range of strategies the firm offers.”

Liontrust also deserves a mention as over 50% of its funds have been awarded five FE-crowns in this latest rebalance. Overall, Liontrust comes joint-second along with T.Rowe Price.

Sophie Meatyard, Fund Analyst at FE, comments: “The Liontrust Sustainable fund range has performed particularly well over the last year. The funds have outperformed their respective benchmarks significantly, driven by their decisions to exclude oil and gas companies which has been a good call and for many funds, structural biases towards technology companies has been positive. On top of this stock selection for the individual funds has been excellent.”

Groups

Group

 

Total no. of Funds

 

No. of 5 Crown Funds

% of 5 Crown Funds

BlackRock

77

12

15.6%

Liontrust

21

11

52.4%

T. Rowe Price

38

11

28.9%

Aberdeen Standard Investors

147

10

6.8%

Quilter Investors

61

9

14.8%

Janus Henderson Investors

74

10

13.5%

PIMCO

38

8

21.1%

Royal London Asset Management

44

8

18.2%

Baillie Gifford

26

7

26.9%

Neptune

19

7

36.8%

 

Funds

11 funds have moved from a 1-crown to a 5-crown rating since January. This includes Aberdeen Strategic Bond, Hermes Multi-Strategy Credit and Quilter Investors Bond 1, which all sit under the Sterling Strategic Bond sector. The UK All Companies Sector had three funds move in same suit; EdenTree UK Equity Growth, Sanlam Active UK and Slater Growth.

Charles Younes, Research Manager at FE, comments: “The Hermes credit team have done very well over the last six months, benefitting from both the risk-on environment and tightening credit spreads. Strong gains made in 2019 so far has more than offset the losses generated in the fourth quarter of 2018.”

FE Crowns Rating methodology

FE Crown ratings are calculated by building up a ‘crown score’. The score is made up of three parts, and each part is calculated by reference to a benchmark for the fund. Once the benchmark is assigned, FE then applies three tests (an alpha based test, a volatility score and a consistency score) to the total return history of the fund. Three years of history is required to carry out these scores, so any fund with less history than this will not qualify for a rating.

Funds are assigned ratings based on their total scores, according to the following distribution:

  • the top 10% - 5 FE Crowns
  • the next 15% - 4 FE Crowns
  • the next 25% - 3 FE Crowns
  • the next 25% - 2 FE Crowns
  • the bottom 25% - 1 FE Crown

Charles Younes, FE Research Manager, said: “We rate funds with a three-year history, and we do not charge anyone for this service. We believe that quantitative ratings have an important role to play in supporting accurate and fair comparisons of historic performance but not future performance.  Our objective is to make the market more transparent and accessible – ultimately it’s about helping people make better investment decisions.”

For more information about the methodology, please contact the press office. 

-ENDS-

NOTES TO EDITORS

About FE

www.financialexpress.net

FE is a leading international provider of data and technology to the asset management and wealth management industries, with clients ranging from the world’s largest asset managers and banks to financial advisers and distributors. FE connects these groups to enable better informed investment decision making, providing data, documents, tools, research, ratings and model portfolios. In November 2018, FE joined forces with two fund data businesses based in Europe ꟷfundinfo (Switzerland) and F2C (Luxembourg).  This combination harnesses the complementary capabilities, reach and resource of each firm, increasing the breadth and depth of the client offering and positioning the firm for rapid international growth. FE employs c.600 people across UK, Switzerland, Luxembourg, India, Australia and other European and Asian centres.

Media Contact

Sonia Devji

FE Marketing Communications Assistant

T / +44 207 534 7620

E / press@financialexpress.net