The fund group scored the top rating in three asset classes: Global Equity, UK Fixed Income and International Fixed Income.
Among M&G’s standout portfolios are M&G Optimal Income, M&G Corporate Bond and M&G Strategic Corporate Bond, all headed up by FE Alpha Manager Richard Woolnough (pictured).
All three have made more than their respective sector averages over three years and the M&G Strategic Corporate Bond and M&G Corporate Bond funds are first and sixth best in their IMA Sterling Corporate Bond sector over the past decade.The £9bn M&G Global Dividend fund, managed by FE Alpha Manager Stuart Rhodes, contributed to the firm’s top-rating in global equity.
The fund is top quartile in the IMA Global sector over three and five year measures.
It has returned 92.5 per cent over five years compared to the sector average’s 73.0 per cent. The fund’s benchmark, the MSCI AC World, has gained 64.99 per cent over the same period.
Performance of fund, sector and benchmark
Source: FE Analytics
Commenting on M&G, Amandine Thierree, fund analyst at FE said: “M&G’s success in fixed income can be attributed to their talented and experienced portfolio managers, and a huge pool of credit analysts, who are responsible for picking the best securities within allocations, set by the portfolio managers.”
“Research and debate is continual at all levels. Unsurprisingly, M&G dominates both the UK and international fixed income space because their research is done at a global level.”
“For example in the sterling corporate bond sector, holdings can be in foreign companies so long as they issue debt in pounds, so the fixed income team has a global investment universe.”
“M&G’s equity rating is certainly influenced by their Global Dividend fund, which is over £9bn in size. Here again their resources are extensive, with teams divided by strategy rather than region. This forces managers and analysts to confront each other with their views on the same company, from different perspectives.”
FE Group Awards 2014
Source: FE Analytics
Invesco Perpetual held onto the “outstanding” rating they have held for the previous two years in UK Equity, despite the departure of star manager Neil Woodford over the course of the year.
FE Alpha Manager Mark Barnett’s Invesco Perpetual Income and Invesco Perpetual High Income funds are amongst the group’s most notable UK equity products.
Both previously managed by Woodford until his departure in April 2014.
Invesco Perpetual was also named “outstanding” in Mixed Assets for the first time.
Among its standout performers are Invesco Perpetual Distribution and European High Income, which are top quartile performers in their IMA Mixed Investment 20-60% sector over one, three and five year periods.
Performance of funds and sector over 5yrs
Source: FE Analytics
As well as Invesco Perpetual, Schroder Investment Management and Threadneedle Investment Services also received two top awards each.
Threadneedle scored “outstanding” in Smaller Companies and Other Developed Market Equity Markets and was “highly commended” for UK Equity, all of which it achieved last year.
Schroders held the outstanding award for Property it received last year, and added another in Smaller Companies.
It was also “highly commended” for UK Equity and Other Developed Equity Markets.
Oliver Clarke-Williams, fund analyst at FE, says that Schroders’ recent acquisition has made them a much stronger outfit.
“Following Schroders’ purchase of Cazenove, the now Schroder UK Dynamic Smaller Companies fund forms part of its score, helping Schroders to clinch the small-cap award,” he said.
Now in their third year, the annual, quant-based awards are calculated using investment performance as well as assets under management.
FE combines the FE Crown Fund Ratings that each group’s funds in the major asset classes have scored, allocating a higher weighting to ratings attained by larger funds.
To gain an “outstanding” award, groups must be standout leaders in their asset classes.
FE found that in most asset classes a second house or several houses fell in behind the leader but were still clearly ahead of the pack; these groups receive a “highly commended rating”.
FE is under no obligation to appoint an “outstanding” or “highly commended” rating to asset managers in each asset class and if there are no stand-out groups within an asset class, no awards are given.
Commenting more generally on the awards Clarke-Williams said: “They are particularly useful if a lead fund manager leaves an award-winning group; investors can take reassurance that the group in question possesses deeper expertise and performance is unlikely to be solely attributable to the departing manager.”
He highlights Woodford’s departure from Invesco as a good example.
“For a complete picture of performance and capabilities, the Group Awards are designed to be taken into account alongside FE’s other ratings: FE Alpha Manager Ratings for individual managers; FE Crown Fund Ratings for funds; and the FE Adviser Fund Indices, which reveal asset allocations and fund picks recommended by the UK’s leading IFAs and wealth managers,” Clarke-Williams finished.
All of these ratings are then used to create the FE Select 100 list.
