Category Investments

Coronation comes out tops again

24 July 2013 PlexCrown

Coronation ranked as the leading unit trust management company for the third consecutive quarter at the end of June 2013, achieving an overall rating of 4.657 PlexCrowns out of a maximum of 5.000. (See Table 1)

Coronation had the highest South African rating of 4.773 PlexCrowns. It achieved the third-highest ratings in all three broad South African categories (Equity and Real Estate, Interest-bearing and Income and Multi Asset Non-income). Coronation shared the fifth-highest rating with Absa and Marriott in Global and Worldwide with 4.000 PlexCrowns. The Coronation Balanced Defensive Fund, Coronation Capital Plus Fund, Coronation Industrial Fund and Coronation Property Equity Fund were ranked top in their respective subcategories, while 16 (84%) of the company’s 19 rated funds achieved above-average ratings of 4 or more PlexCrowns.

Allan Gray was placed second with an overall rating of 4.523 PlexCrowns. Allan Gray had the second highest South African rating of 4.439 PlexCrowns. The investment house shared first place with Cadiz in the broad South African Interest-bearing and Income category and shared the lead in the Global and Worldwide category with Old Mutual and Regarding Capital Management. Allan Gray ranked fifth in SA Multi Asset Non-income and shared sixth position in SA Equity and Real Estate with Personal Trust, Satrix and Met CI. The Allan Gray Bond Fund, Allan Gray-Orbis Global Equity Feeder Fund and Allan Gray-Orbis Global Fund of Funds held the top positions in their subcategories.

With global investors shunning emerging-market assets and currencies, global funds again dominated the top of the return table in the June quarter while South African funds populated the bottom. Allan Gray-Orbis Global Equity Feeder Fund and Allan Gray-Orbis Global Fund of Funds were the best-performing funds over the past quarter with total returns of 16.70% and 15.07% respectively with dividends and interest reinvested. The Allan Gray-Orbis Global Equity Feeder Fund and the Old Mutual Global Equity Fund were the best-performing funds over the last year with 62.14% and 59.77% respectively, while Satrix INDI ETF topped the charts over three years. Real estate funds still lead the way over five years with 22.5% per year with income distributions reinvested.

South African fund managers and investment houses had to contend with a very difficult second quarter. The past 12 months have been extremely challenging due to the significant changes in the global investment environment and the evolving South African socio-political/economic environment. The extent of response to the changing environment is especially evident in the divergent returns of South African equity and equity-related funds where most savers’ money is invested.

The return spread between the best and worst general equity fund (including large-cap funds) was 20.4% over the last quarter and 43.3% over the past 12 months. The return spreads between the best and worst funds over the past 12 months in the SA Multi Asset High Equity and SA Multi Asset Medium Equity subcategories were 23.5% and 16.8% respectively, while the return spreads over the last quarter were 12.8% and 5.7% respectively (See Table 2).

The spread of returns is particularly evident in the combined SA Equity General and Large Cap subcategory. Only 27% of the funds managed to beat the return of 21.01% on the FTSE/JSE All Share Index, while the return of the funds in the combined subcategory averaged 16.9% (See Graph 1).

To ascertain the extent to which the respective investment houses responded to changes in the investment environment over the past year, the percentage rankings of the one-year returns of a management company’s funds in the combined SA Equity and Large Cap subcategory, SA Multi Asset High Equity and SA Multi Asset Medium Equity subcategories were calculated and averaged. Index-tracking funds and funds following specific methodologies such as fundamental indexation were excluded. The investment houses that responded best to the changing global and domestic environment were Grindrod, Foord and Prudential (See Table 3).

Table 1: Domestic CIS Management Company Ratings

Table 2: Return spreads

Table 3: Investment houses that responded best to the changing global and domestic environment over the past year

Graph 1:

Note: The information in the above tables and chart has been sourced from PlexCrown and Profile Data.

The PlexCrown Survey was based on data provided by Profile Data and fund classifications by ASISA. Past PlexCrown Surveys are available to subscribers at

Please note:

In terms of the qualifying requirements, a management company must have a rated fund in each of the broad unit trust sectors, also known as major asset classes. The methodology to calculate the ratings of Collective Investment Scheme management companies is based on management companies’ ratings in the four broad unit trust sectors, where the ratings of the funds in their respective subcategories, size and skill are taken into account.

The size of a rated fund of a company relative to the combined size of all the rated funds in that company’s fold in a specific broad asset class is also taken into account to determine each management company’s rating in their broad unit trust sectors or asset classes.

Only registered CIS management companies may qualify for management company ratings (South African, Global and Overall). Other companies are rated separately if their funds are listed as “third-party funds” under a registered CIS management company and they satisfy the same qualification requirements as for their registered counterparts.

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