Allan Gray does it again in Plexcrown survey

Allan Gray once again receives the laurels as South Africa’s top-rated collective investment scheme (CIS) management company in the latest PlexCrown Survey for the quarter ended March 2009. This achievement follows Allan Gray’s top ranking in December 2008, second position in September 2008 and another win in June 2008.

The PlexCrown Fund Ratings are used as the basis for the prestigious annual Raging Bull Awards for the unit trust industry, says Ryk de Klerk, director of PlexCrown Fund Ratings. The coveted top position denotes consistently good performance on a risk-adjusted basis.

The survey enables financial advisers and investors to compare individual funds in their subcategory on a risk-adjusted return basis, rate CIS management companies and see at a glance where their specific competencies lie.

A total of 346 funds qualified for ratings at 31 March 2009, compared with 321 funds at 31 December. More than two-thirds of the rated funds maintained their ratings while 28,66% underwent minor rating changes.

Seven funds received major upgrades. Nedgroup Investments Bond Fund, Coronation Financial Fund A and Quantum Core Fund were promoted from three to five PlexCrowns. Coronation Market Plus advanced from two to four PlexCrowns, while Advantage International Bond Fund of Funds, Allan Gray Bond Fund and Flagship Domestic Flexible Fund progressed from one to three PlexCrowns.

Seven funds had major downgrades. SIM Industrial Fund and Indequity Dynamic Fund of Funds went from five to three PlexCrowns. Coronation Smaller Companies Fund and Osborne Flexible Fund were downgraded from four to two PlexCrowns. Absa Flexible Funds, STANLIB US Dollar Bond Fund of Funds and Valugro Property Fund dropped from three to one PlexCrown.

A total of 24 funds qualified for ratings for the first time. Of this group, Fraters Islamic Equity Fund achieved a rating of five PlexCrowns. Cadiz Managed Flexible Fund, Foord International Feeder Fund, Imalivest Flexible Fund, Investec Cautious Managed Fund, Marriott Prudential Income Fund of Funds, Noble PP Balanced Fund of Funds A and Noble PP Wealth Creator Fund of Funds were rated at four PlexCrowns.

Allan Gray achieved top positions in both the Domestic and Foreign management company categories, attaining an overall rating of 4.375 PlexCrowns out of a maximum score of five. “There is little doubt that Allan Gray read the bear market correctly, excelling in both asset allocation and equity selection domestically and internationally,” says De Klerk.

Allan Gray’s top spot in the Domestic category was achieved by joint first positions in Domestic Equity and Domestic Asset Allocation, and a significantly improved position in Domestic Fixed Interest. The management company’s superior ranking in the Foreign category was underscored by its supremacy in Foreign Equity and joint first position in Foreign and Worldwide Flexible.

According to Greg Fury, chief operating officer of Allan Gray, this success is a direct result of adherence to the discipline and rigour of an unchanging long-term investment approach in spite of the recent challenging times.

“As much as we focus on returns, our investment approach seeks to limit risk of loss,” says Fury. As a result, our investors sometimes suffer relative short-term underperformance when there are market rallies and when consensus views drive up prices of specific stocks that we don’t hold as a consequence of our investment approach.”

Prudential was again overall runner-up with a rating of 3.667 PlexCrowns. Prudential’s strong showing is due to its domestic performance, as a weak foreign rating significantly diluted its overall rating. Prudential was runner-up in the Total Domestic category, as it jointly topped Domestic Equity and achieved above-average ratings in Domestic Asset Allocation and Domestic Real Estate.

Nedgroup Investments, which outsources the investment management ofits funds, was third overall with 3.531 PlexCrowns. Its ranking is supported by a third place in the Total Domestic category. This was achieved by a first place in Domestic Fixed Interest and an above-average rating in Domestic Equity.

According to De Klerk, ratings are done in line with guidelines set by the Association of Collective Investments. The emphasis is on the longer term and fund subcategories are rated only if they have at least five funds of three years or older. Only funds with an official track record of at least three years qualify for rating.

The complete PlexCrown Survey is available at www.plexcrown.co.za.

Table 1: Leading funds per unit trust category

Previous leaders in brackets and italics