The latest rebalancing of the FE Crown Ratings has seen most of the funds in Artemis’ US equity range walk away with four or five crowns as soon as they beaome eligible for a rating.
Four of Artemis’ five-strong range have been awarded top ratings in the rebalance, while products offered by the likes of BlackRock, Liontrust, Polar Capital and Columbia Threadneedle have also put in a good showing in their first ever rating.
In order to qualify for an FE Crown Rating, funds must have a three-year track record. The ratings are a quantitative measure designed to help investors to distinguish between funds that are strongly outperforming their benchmark and those that are not, examining funds' stockpicking, consistency of outperformance against a credible benchmark and achievement of results compared with risk.
The top 10 per cent of funds are awarded five FE Crowns, the next 15 per cent receive four crowns and each of the remaining three quartiles are given three, two and one crowns respectively.
Performance of fund vs sector and index since launch
Source: FE Analytics
The latest rebalance has seen Artemis US Absolute Return, which is run by FE Alpha Manager Stephen Moore, scoop five FE Crowns. As the chart above shows, the fund has generated a 12.44 per cent total return since launch; this is higher than the average IA Targeted Absolute Return member, although comparisons of this kind are not really appropriate for this sector.
Moore’s Artemis US Extended Alpha and Cormac Weldon’s Artemis US Select and Artemis US Smaller Companies funds were also awarded four FE Crowns in their first rating.
All four of the funds – as well as Artemis US Equity, which was given three crowns – were launched in 2014 after Weldon and his US equity team joined Artemis after a successful period at Columbia Threadneedle Investments.
Charles Younes, research manager at FE, said: “Poaching the US equity team from Columbia Threadneedle back in 2014 has really paid off for Artemis. They have given leading managers Cormac Weldon and Stephen Moore the freedom to replicate their investment philosophy resulting in strong performance and commercial success.”
Other funds achieving five FE Crowns in their first ever rating include Guy Rushton’s Polar Capital UK Absolute Equity, which focuses on the UK and aims to generate positive absolute returns over rolling 12-month periods. Since launch in September 2014, it has made a total return of close to 120 per cent.
Younes said: “The long/short equity Polar Capital fund returned a positive performance of 47.51 per cent last year with its stock picking and long exposure to materials, IT and financials paying off. But this is a highly volatile strategy, which does not suit every investor profile.”
Source: FE
Another fund that has taken a top rating is Threadneedle Global Multi Asset Income. Managed by Toby Nangle, the fund resides in the IA Mixed Investment 20-60% Shares sector and has posted a first-decile 32.57 per cent total return since its launch in August 2014.
Peter Michaelis and Simon Clements’ Liontrust Sustainable Future Defensive Managed fund has received five crowns, while the managers’ Liontrust Sustainable Future Cautious Managed has been awarded four. As their names suggest, sustainable and responsible investment is at the heart of the funds, with their process targeting companies with a product or service offering or benefiting from strong environmental or social trends such as efficiency or quality of life.
The now five crown-rated MI Chelverton UK Equity Growth fund, managed by David Taylor and James Baker, is currently the best performer in the IA UK All Companies sector. The portfolio is built around small caps, using the same process that the managers honed on their successful MI Chelverton UK Equity Income fund.
Of course, not every fund was awarded four or five crowns in their first rating, with around 30 being given the bottom rating of just one FE Crown. These are revealed in the table below.
Source: FE
In keeping with LF Woodford Equity Income seeing its rating lowered from five to one crown, the Old Mutual Woodford Equity Income mirror has also been given a one-crown rating.
Other funds with the lowest FE Crown rating include TM Sanditon UK Select, TM Sanditon European Select, SJP UK Income, Schroder Global Multi-Asset Income and Royal London Global High Yield Bond.