What do First State and The King’s Speech have in common? They’ve both been cleaning up at awards ceremonies this year. At an awards ceremony held in London last night, Graham Fox, Head of Wholesale UK & Europe for First State Investments picked up the awards for Best Asia Pacific Equity Fund, Best Global Emerging Markets Equity Fund, and—the icing on the cake—Best Large Equity Fund House.
The Morningstar UK Fund Awards recognise retail funds and fund groups that added the most value for investors within the context of their relevant peer group in 2010 and over the longer term. At a relatively low-key event compared to some fund industry awards ceremonies—as a provider of independent investment research Morningstar is not paid by fund houses to rate their offerings—Geoff Balzano, CEO of Morningstar UK, and Richard Romer-Lee, Joint Managing Director of OBSR, a Morningstar company, dished out a total of 15 awards. Ten awards recognised the quantitative achievements of individual funds and five more were awarded to First State, Allianz Global Investors, Threadneedle, MFS and M&G in various fund house categories.
Presenting the awards, Romer-Lee quoted Morningstar President of Fund Research Don Phillips in describing the differences and compatibility of both quantitative and qualitative assessment. “Qualitative ratings are an aptitude test, quantitative ratings are an achievement test." Romer-Lee added that he was pleased to note that many of those funds winning quantitative awards last night have also been recognised through our qualitative research and ratings.
In addition to the Best Large Equity Fund House Award, First State Investments’ Asia Pacific Sustainability fund won Best Asia Pacific Equity Fund and its Global Emerging Markets fund won Best Global Emerging Markets Equity Fund. Asia Pacific Sustainability managers David Gait and Sashi Reddy apply First State’s strategy in seeking high-quality companies with sustainable business models and predictable growth. Their application of this strategy has led to strong results over the long term, and in 2010 led to competitive returns despite a heavy underweighting in highly cyclical sectors.
Meanwhile, Jonathan Asante and Glen Finegan, who manage the First State Global Emerging Markets fund, have applied First State’s philosophy with aplomb, which has led to strong outperformance over the long term. They also successfully navigated the fund through choppy markets in 2010 despite an underweighting in the hotter, economically sensitive areas of the market.
In awarding First State one of the house fund awards, Morningstar investment analysts recognised that the group has enjoyed considerable success in the management of equity funds investing in the Asia-Pacific region, global emerging markets, and resources sector. Its considerate and team-based approach has produced excellent returns for investors and Morningstar’s Best Large Equity Fund House Award reflects that achievement.
First State aside, the largest cheer at the awards ceremony was for the winner of the first award to be announced, Best UK Large-Cap Equity Fund, which was scooped up by Troy Trojan Income. Fund manager Francis Brooke’s conservative approach has delivered strong risk-adjusted returns during a difficult year. Moreover, since the fund was launched, he has delivered an increasing dividend for investors every year.
Winners are selected using a quantitative methodology developed by Morningstar that considers the one-, three-, and five-year performance history of all eligible funds, and adjusts returns for risk using Morningstar Risk, a utility theory-based screen that imposes a higher penalty for downside variation in a fund’s return than it does for upside volatility. Click here for the full methodology.
Below is the full list of Morningstar UK Fund Awards 2011 winners. Click on a fund name to see its Morningstar report.
Fund Category Awards Winners
Best UK Large-Cap Equity Fund
Troy Trojan Income
Fund manager Francis Brooke’s conservative approach has delivered strong risk-adjusted returns during a difficult year. Moreover, since the fund was launched, he has delivered an increasing dividend for investors every year.
Best UK Mid-Cap/All-Cap Equity Fund
BlackRock UK Special Situations
Richard Plackett’s pragmatism came to the fore last year when markets were particularly unsettled. His early emphasis on companies with international earnings meant the fund was correctly positioned for investors in 2010.
Best UK Small-Cap Equity Fund
Standard Life UK Smaller Companies
The fund is managed by an experienced practitioner in Harry Nimmo, who has invested through a variety of market cycles and remains true to his discipline at all times. Nimmo’s focus on international names led to an outstanding 2010 but his stock-picking ability has also resulted in strong returns over the long term.
Best Asia Pacific Equity Fund
First State Asia Pacific Sustainability
Managers David Gait and Sashi Reddy 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 in 2010 led to competitive returns despite a heavy underweighting in highly cyclical sectors.
Best Global Emerging Markets Equity Fund
First State Global Emerging Markets
Jonathan Asante and Glen Finegan have applied First State’s philosophy with aplomb, which has led to strong outperformance over the long term. They also successfully navigated the fund through choppy markets in 2010 despite an underweighting in the hotter, economically sensitive areas of the market.
Best Europe ex-UK Large-Cap Equity Fund
CF Odey Continental European
Feras Al-Chalabi’s top-down approach, which identifies macro trends that will benefit industries and regions, has produced strong results over the long term. In 2010, he showed a high level of conviction in concentrating the portfolio in consumer goods and industrials stocks, which led to significant outperformance.
Best Europe Large-Cap Equity Fund
Threadneedle Pan European
Ann Steele joined Threadneedle in 2009 and has since been a key figure in its European equity team. The team rewarded investors in 2010 with their strong selection in stocks with a notable emerging markets presence.
Best Global Large-Cap Equity Fund
Ecclesiastical Amity International
Manager Robin Hepworth has delivered competitive long-term returns for investors using an ethical overlay. The fund’s exposure to Asian growth stocks and UK companies with international earnings helped it post strong results in 2010.
Best GBP Corporate Bond Fund
M&G Strategic Corporate Bond
Richard Woolnough has managed the fund since its launch in 2004 and has considerable experience in analyzing corporate bonds, combining macroeconomic analysis with market judgment, and drawing on the credit analysis from M&G’s large credit team. This is illustrative of his proven track record in successfully assessing the macroeconomic cycle and positioning the fund accordingly.
Best US Large-Cap Equity Fund
Smith & Williamson North American Trust
Lady Tana Focke is one of the most experienced U.S. equity managers outside of the United States and has strong support in co-manager Robert Royle. They have delivered steady returns over the long term using a conservative approach, which made the most of a difficult 2010.
Fund House Awards Winners
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 resources sector. Its considerate and team-based approach has produced excellent returns for investors and this award reflects that achievement.
Best Large Fixed Interest Fund House
Allianz Global Investors
Allianz is a major force in fixed income globally, and the acquisition of PIMCO in 1999 sealed its credentials as one of most well-known and well-regarded fixed-income operations. Allianz offers investors a highly diversified product suite with a reputation for innovation and consistent performance.
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 collegiate approach across asset classes has produced consistent long-term returns, reflected in this Morningstar award.
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 express their views fully 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 to capture 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.
Click here to find out who's in the running for a 2011 Morningstar European Manager of the Year Award.
