Top Marks for three funds!
Posted on:
11
Jan
2012
by James Cholmondley Farmer
FE singles out best absolute return funds in Crown Fund Ratings rebalancing
Three absolute return funds achieve top score of five FE Crowns
Standard Life Investments Global Absolute Return Strategies, Henderson Credit Alpha and Insight Absolute Insight were the only absolute return funds to achieve the top score of five FE Crowns in the latest rebalancing of the FE Crown Fund Ratings.
This was the first time FE has applied its new five FE Crown Fund Ratings system to the absolute return sector since the methodology was redesigned in September 2011 to incorporate a five tier ranking up from the previous three FE Crowns. To achieve the new top score, funds need to have delivered outstanding performance over the three years to 31 December 2011, measured in terms of alpha generation, volatility and the consistency with which they have beaten their benchmark.
Of the 23 absolute return funds with three-year track records that were eligible for a rating, another three funds scored a commendable four FE Crowns – CF Ruffer Absolute Return, Henderson Absolute Return Bond and S&W The Tenax, managed by Church House Investment Management.
Many absolute return investors have chosen wisely, placing their money with the top scoring Standard Life Investments Global Absolute Return Strategies; at £9.03 billion it is the largest fund in the absolute return sector and returned 35.32% over three years to 31 December 2011.
The other top rated funds are smaller; Henderson Credit Alpha had £531.5 million under management at 30 April 2011 while Insight Absolute Insight had £347.8 million at 30 November 2011, according to FE Analytics. They returned 39.38% and 20.75%, respectively, for the three years to 31 December 2011. Henderson’s Stephen Thariyan and Insight’s Reza Vishkai, who run the two funds in question, are both FE Alpha Managers, indicating that they have performed consistently well throughout their careers. (Standard Life Investments Global Absolute Return Strategies is managed by the multi-asset investment team.)
Rob Gleeson, Investment Product Consultant at FE, said: “Absolute return funds have been hard to rate properly because they are not managed against a traditional benchmark. FE has devised a way to measure their outperformance using Sortino ratios as well as alpha versus a benchmark. This allows us to score absolute return funds on a like for like basis with other sectors so investors can compare them to funds targeting relative outperformance.”
Tags: IFA | investment
