July 24, 2010
By Laura du Preez
Investing in unit trusts is a flexible way to save, particularly for the medium to long term. The PlexCrown Fund Ratings is one of the tools you can use to choose a unit trust management company that delivers good performance consistently.
Allan Gray maintained its top position in the PlexCrown ratings, which rank unit trust management companies, based on the risk-adjusted performance of its funds over periods up to five years ending on June 30.
Five of the manager's six funds that qualify for PlexCrown ratings achieved the highest score of five PlexCrowns, while the sixth fund achieved the next-best rating of four. This gave the manager an average score of 4.750 PlexCrowns.
Allan Gray first qualified for inclusion in the overall ratings in 2008. Since then Allan Gray has been in the top position nine times out of 10 quarters, according to Rickus Ferreira, an analyst at PlexCrown Fund Ratings.
PlexCrown Fund Ratings determines the leading unit trust fund manager from an overall rating calculated on the basis of the PlexCrown ratings a manager achieves for each of its qualifying funds.
Each fund is awarded a single rating of between one and five, based on four different measures of risk-adjusted returns over periods up to five years.
To determine the leading manager, PlexCrown Fund Ratings calculates the average scores in certain broad unit trust sectors for each manager based on the PlexCrown ratings it obtained for all qualifying funds in those sectors. These averages are used to determine the manager's average score for its funds that invest in local markets and another for its funds that invest in offshore markets.
The average score for funds invested in local markets is accorded a weighting of 75 percent, while that for funds invested in foreign markets counts for 25 percent of the overall score.
When its average scores in the unit trust sectors in which it competes are compared with those of its peers, Allan Gray was in many cases in first position. It was:
Joint first in domestic equity, based on a PlexCrown rating of five for its general Equity Fund;
Third in domestic fixed interest, where its Bond Fund obtained four PlexCrowns;
Joint first in domestic asset allocation, where its Balanced Fund and Stable Fund each obtained five PlexCrowns;
Joint first in foreign equity, where its Orbis Global Equity Feeder Fund achieved five PlexCrowns; and
Joint first in foreign and worldwide flexible, where its Orbis Global Fund of Funds obtained a ranking of five PlexCrowns.
Based on these scores, Allan Gray was:
First on its overall domestic score; and
Joint first on its overall foreign score.
Nedgroup second
Nedgroup Investments has been among the top three management companies six times over the past five years but has never been rated higher than third.
After dropping to fourth position at the end of the first quarter of this year, it moved back strongly into second position, with an overall average rating of 3.938. This is the highest ranking Nedgroup Investments has achieved, Ferreira says.
Nedgroup Investments has 15 funds that qualify for PlexCrown ratings. It achieved five PlexCrowns each for its Bond Fund, Value Fund, Financials Fund and Managed Fund (a domestic asset allocation prudential variable equity fund).
Nedgroup Investments scored four PlexCrowns each for five of its domestic equity funds: the Rainmaker, Quants Core Equity, Growth, Mining and Resource, and Entrepreneur funds. It also scored four PlexCrowns each for its Bravata Worldwide Flexible Fund and its Global Balanced Feeder Fund (a foreign asset allocation flexible fund).
One of Nedgroup Investments's foreign equity general funds, the International Equity Feeder Fund, scored three PlexCrowns, while the other, the Global Equity Feeder Fund, obtained two PlexCrowns.
Two domestic funds, the Equity Fund and the Balanced Fund (asset allocation prudential variable equity), also obtained only two PlexCrowns each.
In the broad sectors, Nedgroup Investments's better placings relative to its peers were:
Second in total domestic; and
First in the domestic fixed- interest sector.
Sanlam third
Sanlam Investment Management (SIM) was placed third in the management company rankings, with an average rating of 3.760.
Ferreira says Sanlam has never been in the top three rankings of management companies.
Sanlam reclassified its funds into two separate entities in 2008. These were Sanlam and SIM. Sanlam no longer qualifies for inclusion in the overall rankings, because it does not have funds in all the required sub-categories. SIM qualified for inclusion in the rankings for the first time at the end of the first quarter of this year, when it was placed fifth.
SIM has 16 funds that were rated in the PlexCrown ratings.
The Global Best Ideas Feeder Fund was SIM's best risk-adjusted performer and scored five PlexCrowns. This fund earned Sanlam the following top positions:
Joint first in total foreign; and
Joint first in foreign equity.
Eight of SIM's domestic funds each scored four PlexCrowns. These included four equity funds: the Financial, the General Equity, the Top Choice Equity and the Value funds. The other four were asset allocation funds: the Balanced Fund (prudential variable equity), and the Managed Aggressive, Managed Moderate Aggressive and the Managed Moderate funds of funds (all flexible funds).
SIM's Bond Fund, Growth Fund, Industrial Fund, Small Cap Fund and two asset allocation flexible funds, the Managed Cautious Fund of Funds and the Managed Conservative Fund of Funds, all achieved three PlexCrowns each.
SIM's Property Fund obtained only two PlexCrowns.
Offshore ratings
Allan Gray's offshore partner, Orbis, maintained its position at the top of the rankings of offshore management companies. These companies manage funds that are domiciled outside of South Africa but, because they are registered with the Financial Services Board, can be marketed here.
Orbis achieved an overall rating of 4.250. This was achieved with a joint second position in the equity sector and the fixed-interest sector.
Orbis has six funds that qualify for PlexCrown ratings. One of its global fixed-interest funds, the Optimal SA Fund (US dollar class), obtained five PlexCrowns, while the other, the Optimal SA Fund (euro class), obtained four Plexcrowns.
One of its equity funds, the SICAV Japan Equity Fund (yen class), obtained five PlexCrowns, while the SICAV Japan Equity (euro class) scored only three PlexCrowns.
TriAlpha, a strong performer in the fixed-interest sectors, was ranked second. Investec came third, based on its strong performance in the global asset allocation sector.
  
 
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