Rob Gleeson and the FE Research team have long used group ratings when compiling their FE Select 100 list of recommended funds, but until now have kept the results behind closed doors.
Here, we can reveal which groups score the highest across a number of different asset classes.
As well as achieving maximum scores in UK fixed interest and global equity, M&G was awarded outstanding status for its international fixed interest funds and was "highly commended" for its property portfolios.
Among M&G’s standout portfolios are Richard Woolnough’s M&G Optimal Income, M&G Corporate Bond and M&G Strategic Corporate Bond funds, which are all in the FE Select 100.
The £7bn M&G Global Dividend fund, managed by Stuart Rhodes, contributed to the firm’s top-rating in global equity.
M&G runs two property funds – M&G Property Portfolio and M&G Global Real Estate Securities.
Just behind M&G was Threadneedle, which was awarded outstanding status for smaller companies and other developed equity markets, and highly commended for UK equity and international bonds. Among the group’s standout individual performers are Philip Dicken’s Threadneedle European Smaller Companies fund and Threadneedle American Extended Alpha.
FE Groups Awards 2013
| Asset class | Outstanding | Highly Commended |
|---|---|---|
| UK Equity | Invesco Perpetual | Threadneedle Investment Services |
| AXA Investment Management | ||
| JO Hambro Capital Management | ||
| Smaller Companies | Threadneedle Investment Services | Standard Life Investments |
| Marlborough Fund Managers | ||
| Global Equity | M&G | Newton & BNY Mellon Asset Management |
| Other Developed Equity Markets | Jupiter Unit Trust Managers | BlackRock |
| Henderson Global Investors | ||
| Threadneedle Investment Services | Fidelity | |
| Schroder Investment Management | ||
| Emerging Markets | First State Investments | Aberdeen Asset Management |
| UK Fixed Income | Fidelity | Insight Investment Management |
| M&G | ||
| International Fixed Income | M&G | Threadneedle Investment Services |
| Alternative Assets | Standard Life Investments | Henderson Global Investors |
| Ruffer | Insight Investment Management | |
| Mixed Assets | Jupiter Unit Trust Managers | |
| Invesco Perpetual | ||
| Scottish Widows | ||
| Property | Schroder Investment Management | M&G |
Source: FE Analytics
Investors will not be surprised to read that Invesco Perpetual scored top marks in UK equity, given the wealth of five crown-rated funds it has in this field. These include Neil Woodford’s Invesco Perpetual Income fund and Mark Barnett’s Invesco Perpetual UK Strategic Income fund.
Invesco also gained an outstanding award for mixed assets, as did Jupiter. The latter achieved outstanding status for other developed equity markets, with Jupiter Japan Income and Alexander Darwall’s Jupiter European fund among the biggest contributors.
Performance of funds and sectors over 5yrs
Source: FE Analytics
The FE Group Awards are designed to showcase strength and depth, and are based on investment performance as well as assets under management in retail funds.
To gain the outstanding rating, groups have to be obvious leaders in their asset class. FE found that in most sectors a second manager, or group of managers, fell in behind the leader but were still clearly ahead of the pack. These managers received a "highly commended" rating.
By highlighting which groups have expertise in specific asset classes, the awards aim to gauge whether a newly launched fund is likely to do well, particularly when there is no track record to assess. If the group already boasts extensive resources and an impressive track record in similar strategies, then the new funds should be well placed to perform strongly.
Commenting on the winners, Rob Gleeson (pictured) and the FE Research team stated: "M&G have made considerable investments in their fixed income capabilities and with 85 analysts they now have one of the largest teams in the country."
"Having such a large amount of proprietary research and analysis available to them, bond managers at M&G have an advantage over their peers and this has directly contributed to their success. M&G has £147bn under management in fixed interest."
As the awards are partly based on assets under management for each sector, most of the winners are large houses. Among the outstanding groups, Marlborough stands out for its smaller, boutique status.
The FE Research team explained: "Giles Hargreave has extensive expertise in small caps and is widely regarded as one of the leading investors in the asset class. Marlborough has built a strong team around Hargreave, who has developed extensive knowledge and expertise and allowed the group to expand its fund range while still keeping a tight focus on this specific area."
Another smaller group relative to the other winners is JOHCM.
"In UK equity, JO Hambro’s investment in managers and support staff has led to a highly capable team with several outstanding funds in the asset class," the team added.
With regard to the highly commended managers, FE Research commented: "Insight Investment Management has strong absolute return capabilities, with the group running five separate strategies that are largely marketed to institutional investors."
"Their expertise in the use of derivatives also lends an advantage that is not easy to replicate without investing heavily. This expertise is all distilled into their Absolute Insight fund."
FE is under no obligation to award outstanding or highly commended statuses in every asset class: in the commodity/energy sector, no awards were given out this year as none of the managers had a clear leading edge over their peers, while in mixed assets there was no obvious second group chasing the leaders.
The awards are rebalanced annually.
