Morningstar UK Fund Awards winners announced
Funds from Majedie Asset, Axa Framlington and First State were among category winners announced by Morningstar in its annual UK Fund Awards.
The Morningstar UK Fund Awards 2012 selects winners according to a quantitative methodology with a qualitative overlay developed by Morningstar, that considers the one-, three-, and five-year performance history of all eligible funds. These are adjusted for risk using Morningstar Risk, a measure that imposes a higher penalty for downside variation in a fund’s return than it does for upside volatility.
|Best UK Large-Cap Equity Fund||Majedie Asset UK Equity A||This team-managed fund has built an admirable record through time, with a five-year return of 5.77% annualised, compared to 0.59% for its average UK Large-Cap Blend peer. During the same period, the fund has displayed notably less risk than its rivals, and lost 10 percentage
points less than its average peer in 2008’s crisis-hit market. In 2011, the fund delivered a positive return of 0.24%, handily besting the 5.32% loss posted by its average UK Large-Cap Blend peer. It benefitted in the period from relatively defensive positioning, with stalwarts such as Royal Dutch Shell, Vodafone, and GlaxoSmithKline helping the fund cope well in a difficult environment.
|Best UK Mid-Cap/All-Cap Equity Fund||AXA Framlington UK Select Opportunities Acc||Nigel Thomas is a pragmatic investor who has shown an ability to navigate the fund through different market cycles. This all-cap growth mandate, which has a strong focus on medium-sized and smaller companies, has delivered outstanding returns to investors.|
|Best UK Small-Cap Equity Fund||Marlborough Special Situations|| This UK Small-Cap fund has benefitted from exceptionally stable management with Giles Hargreave at the helm for more than 13 years. Over the past five years, it has delivered strong performance within its peer group, returning 6.95% annualised, compared to 0.47% annualized
for the UK Small-Cap Equity category average. In that period, the fund has notably outperformed in both up and down years, including 2008 and 2009-a rare feat. In 2011, the fund fell 2.13%, a far better showing than most of its rivals, as the average UK Small-Cap Equity fund fell 8.49%. Cash levels of near 10% helped moderate the impact of the downturn and strong stock selection offset an overweight to industrials.
|Best Asia Pacific Equity Fund||Newton Asian Inc GBP||Jason Pidcock is an experienced stock-picker and marries his bottom-up analysis with Newton’s thematic approach, which aims to identify global themes. The income focus is based on his view that dividends encourage disciplined capital allocation and cash flow generation, which results in a return profile that strongly outperforms during falling markets, helping the fund significantly surpass peers in 2011.|
|Best Global Emerging Markets Equity Fund||First State Global Emerging Markets Leaders A||Managers Jonathan Asante and Glen Finegan apply First State’s strategy in seeking high-quality companies with sustainable business models and predictable growth. This has led to strong results over the long term, and the bias towards high-quality companies was a significant contributor to excellent returns in 2011.|
|Best Europe ex-UK Large-Cap Equity Fund||Threadneedle European Select Retail Net GBP||Although only at the helm from mid-2008, manager David Dudding has continued this fund’s successful run with aplomb. He applies a combination of top-down themes and bottom-up stock selection. In 2011, an overweight to consumer defensives and an underweight to financial services helped the fund deliver the best performance in the Morningstar Europe ex UK Large-Cap Equity category. At the close of 2011, Dudding had guided the fund to an annualised return of 6.58% from 1 July 2008, compared to an annualised loss of 1.81% for the fund’s average peer and its benchmark FTSE World Europe ex-UK index.|
|Best Europe Large-Cap Equity Fund||MFS Meridian European Value A1 EUR||This fund has quietly amassed one of the best records among its Europe Large-Cap Value Equity peers over the past five years. In 2011, a heavy overweight to consumer defensives and healthcare and an underweight to consumer cyclicals and financial services helped it limit losses to 2.52%, compared to a 13.3% loss for the peer group average. The fund has shone less brightly in low-quality or momentum-drive rallies such as that of 2009, but its ability to limit risk and remain competitive across market environments has driven it to a five-year return that ranks in the top 2% of its peer group, with its Morningstar Risk in the lowest 10%–a great combination for investors. Longtime lead manger Barnaby Wiener stepped down in January 2012, but the change isn’t too drastic as Benjamin Stone, co-manager since 2008, has stepped into the lead role.|
|Best Global Large-Cap Equity Fund||Veritas Global Focus Retail GBP|| Charles Richardson and Andrew Headley are a highly experienced management pair, who further benefit from having worked together for a number of years. The diligent application of their investment process, in which they have great belief, has led not only to considerable
outperformance but consistent outperformance in differing market conditions.
|Best GBP Corporate Bond Fund||M&G Strategic Corporate Bond A Inc||Richard Woolnough has considerable experience in the management of corporate bond funds and has a proven track record in successfully assessing the macro-economic cycle and positioning the fund accordingly. His role as a member of M&G’s very well-resourced fixed-income team also allows him to benefit substantially from the expertise of the other portfolio managers and from the credit analyst team.|
|Best US Large-Cap Equity Fund||Julius Baer Multistock-US Leading Stock-USD A||This fund features the expert management of Houston based Fayez Sarofim & Co. The team that runs it has a laser-like focus on high-quality companies with dominant market share, high returns on capital, and low debt, which helps moderate risk relative to the fund’s peers. The fund’s strengths were on full display in 2011 as it was up 9.06%, compared to a 1.67% loss for its average peer. A large overweight to consumer defensive issues such as Phillip Morris and McDonald’s and a significant underweight to financials and cyclicals helped, as did savvy picks such as Apple. Over the past five years, the fund has delivered a return of 5.48% annualised, compared to 2.38% for its average peer, with lower Morningstar Risk than 96% of its peers.|
|Best Large Equity Fund House||First State Investments||First State Investments has enjoyed considerable success in the management of equity funds investing in the Asia-Pacific region, global emerging markets, and the resources sector. Its considered and team-based approach has produced excellent returns for investors.|
|Best Large Fixed Interest Fund House||iShares||Through its extensive ETF range, iShares has done much to bring the benefits of low-cost, passive investing to investors in the UK and around the world. Those benefits are evident across the board, but particularly so in its fixed-income range, where the firm’s funds have routinely proven hard for active managers to beat.|
|Best Multi-Asset Fund House||Threadneedle Investments||Threadneedle has been prominent in running a range of managed funds for investors since its inception in 1994. Its collegial approach across asset classes has produced consistent long-term returns.|
|Best Specialist Equity Fund House||MFS Investment Management||MFS was one of the pioneers of the mutual fund industry, launching the first mutual fund in the United States. That spirit continues today with its diligent research-driven approach, which permits its analysts to fully express their views in portfolios. The investor offering is comprehensive, covering both fixed-interest and equities, providing investors with conviction-driven portfolios.|
|Best Specialist Fixed Interest Fund House||M&G Investments||M&G was one of the pioneers of fixed-income investing in the UK, having launched its corporate bond fund in 1994, followed by a number of funds that captured the evolution of the fixed-income markets. Performance has been strong across the board and M&G was particularly successful at protecting investors’ capital during the turbulent times in the aftermath of the credit crunch.|