Asset manager Morgan Stanley has the highest average FE fundinfo Crown rating of the larger fund groups in the Investment Association universe following the latest rebalance of the ratings, research by Trustnet has found.
FE fundinfo’s Crown ratings are calculated by building up a score based on three parts – an alpha-based test, a volatility score and a consistency score – applied to the total history of the fund, although a minimum of three years track record is required.
The latest semi-annual rebalance of the FE fundinfo Crown ratings took place earlier this year and saw Liontrust Asset Management awarded the highest number of top ratings.
However, it was Morgan Stanley Investment Management that has the highest average FE fundinfo Crown rating of the groups with 10 funds or more, scoring of 3.786.
The asset manager had 53 FE fundinfo Crowns spread across 14 rated funds, including top-rated quality-growth strategies Morgan Stanley Global Brands and Morgan Stanley Global Opportunity.
The $15.1bn Morgan Stanley Global Brands fund is overseen by FE fundinfo Alpha Manager William Lock and his team. It is a top-quartile performer over the past three years having made a total return of 31.28 per cent against a gain of 6.72 per cent for the MSCI World benchmark and a 9.18 per cent for the average IA Global peer (to 9 March).
Meanwhile, the $9.2bn Morgan Stanley Global Opportunity fund is run by Alpha Manager Kristian Heugh and has made 53.91 per cent over the past three years against a return of 6.2 per cent for the MSCI AC World benchmark.
In second place, EFG Asset Management scored a high average crown score of 3.727.
While it may not be one of the most prominent names in the industry it collected 41 crowns across 11 rated funds, which include top-rated funds New Capital Global Value Credit, New Capital Strategic Portfolio, New Capital Swiss Select Equity and New Capital Wealthy Nations Bond.
Source: FE Analytics
Wealth manager True Potential Investments also scored highly in our study – with an average of 3.65 – across its risk-based range, although these are sub-managed by a number of different asset management groups.
US investment giant Vanguard scored a 3.60 in our study. While it is best known for its range of passive funds, the asset manager has a number of active strategies, some of which are overseen by external managers, such as the top-rated Vanguard Global Balanced and Vanguard Global Emerging Markets funds.
However, its Vanguard LifeStrategy fund-of-trackers range – which blend passive strategies together for different risk appetites – include several funds with high four-crown ratings, as do it Vanguard Target Retirement range.
Aberdeen Standard Investments scored the highest number of FE fundinfo Crowns, counting 383 spread across 153 funds managed by the group. Despite the high number of crowns awarded, however, the group managed an average score of just 2.503.
The group's top-rated funds include Ben Ritchie's £318.2m ASI Europe ex UK Equity fund and the £427.1m ASI UK Real Estate Share fund overseen by Romney Fox.
However, there are also a number of one crown-rated funds such as the £1.4bn Standard Life Investments Absolute Return Global Bond Strategies fund and Thomas Moore's £1.1bn ASI UK Income Unconstrained Equity fund.
The group with the next highest number of crowns was Fidelity International with 237 crowns, although it scored a crown rating average of 2.963 across its 80 rated funds.
Fidelity recently topped the rankings in the FE fundinfo Alpha Manager list, replacing rival BlackRock, but only had 11 top-rated funds following the latest rebalance.
Source: FE Analytics
Bringing up the bottom of the table was multi-boutique asset manager Natixis Investment Managers with the lowest score of 1.667; it had no top-rated funds across its 12 rated funds. Its top-scoring strategy was Natixis Loomis Sayles US Equity Leaders – overseen by Alpha Manager Aziz Hamzaogullari – with a four-crown rating.
Other groups at the bottom of the table with scores below 2.000 included 7IM (1.824), Octopus Investments (1.909), St James’s Place (1.909), JO Hambro Capital Management (1.933) and Carvetian Capital Management (1.970).
Of course, there are many other groups with too few funds to be included in this study scoring highly, such as Fundsmith and Lindsell Train, which had perfect scores of 5, while there were also several groups with low scores of 1.