Allan Gray achieves record PlexCrown ratings

Allan Gray continued its reign as the top unit trust investment house in the second quarter of this year. Winner of the coveted Raging Bull Award for the management company of the year in 2008, Allan Gray topped the charts in the latest PlexCrown Survey based on risk-adjusted returns to 30 June 2007.

“This is the third consecutive quarter that Allan Gray has received the top accolade,” says Ryk de Klerk, director of PlexCrown Ratings. “Even more remarkable is the fact that all of Allan Gray’s qualifying funds achieved the top rating of five PlexCrowns – a first time achievement for any management company since the launch of PlexCrown Ratings in 2005.”

According to De Klerk, Allan Gray’s supremacy in the management company ratings ranged across all spheres of the market, with a joint first in Domestic Equity, Domestic Fixed Interest, Domestic Asset Allocation, Foreign Equity, and Foreign and Worldwide Flexible. It achieved a top ranking in both Total Domestic and Total Foreign.

Despite underperforming at times, Allan Gray has outperformed its peers as measured by the aggregate relative performance index, calculated as the relative performance of all Allan Gray’s funds across all domestic collective investment scheme (CIS) subcategories.

Rob Dower, chief operating officer of Allan Gray says a variety of tough market conditions were experienced during the latest five-year and three-year periods. “We are proud to have done as well as we have for investors through these difficult times,” Dower said.

Although global equity markets had their best quarter since 1999, with the MSCI World Equity Index soaring 19.7% as less-bad financial news in developed economies, together with strong domestic demand in China cheered the markets, Dower is less upbeat.

”Despite market gains in the most recent quarter – which we think are not supported by improvements in the fundamental outlook – investment returns for most investors in South Africa and globally remain poor,” says Dower. “Over three years, even after tax, the average South African investor would have been much better off in cash than in equities.”

De Klerk says that although the recovery in global equity markets seems spectacular, it should be seen in context. “The MSCI World Equity and MSCI Emerging Market Indices are down 31.2% and 30% over one year. On a comparative basis the FTSE/JSE All Share index is down 23.8% in US dollar terms and 24.88% in local currency terms on a total return basis with dividends re-invested.”

This is echoed by Rob Dower: “Although the Allan Gray Equity Fund has performed 15% better than the market over the last 12 months, it is still 10% down over this period. This has been painful for our own investors.”

Dower cautions against optimism about the market. “Looking forward, we are pessimistic about the immediate prospects for most South African businesses of any scale. Although we are finding opportunities to invest our clients’ money where we believe we can achieve long-term returns greater than those available from cash, the short-term results of our efforts are probably even more unpredictable than usual in this market.”

Prudential continues to be the strong runner-up, achieving an overall rating of 3.750 PlexCrowns. The investment house achieved a total domestic rating of 4.000 PlexCrowns driven mainly by its joint first positions in Domestic Equity and Domestic Real Estate, and an above-average rating in Domestic Asset Allocation.

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Leading funds per subcategory on risk-adjusted return basis: