Raging Bull awards

The prestigious awards, which are open to retail investors, saw 38 winners scooping awards. The Raging Bulls are sponsored by Personal Finance, PlexCrown and ProfileData.

• Rezco Value Trend Fund – best domestic asset allocation flexible fund on a risk-adjusted basis and the fund with the highest PlexCrown rating over five years in the ASISA domestic asset allocation flexible sector;

• Coronation Balanced Defensive Fund (A Class) – best domestic asset allocation prudential fund on a risk-adjusted basis and the fund with the highest PlexCrown rating over five years in the ASISA domestic asset allocation prudential high equity, medium equity, low equity and variable equity sectors;

• Marriott Dividend Growth Fund (R Class) – the best domestic general equity fund on a risk-adjusted basis, the fund with the highest PlexCrown rating over five years in the ASISA domestic equity general sector;

• Investec GSF Global Strategic Managed Fund (A Acc Class) – best offshore global asset allocation fund on a risk-adjusted basis and the fund with the highest PlexCrown rating over five years in the ASISA domestic, real estate and general sector;

• Sasfin Value Fund – best broad-based domestic equity fund with the highest ProfileData total investment return ranking over three years in the ASISA domestic equity general, value and growth sectors;

• STANLIB Bond Fund (A Class) – best domestic fixed-interest fund with the highest ProfileData total investment return ranking over three years in the ASISA domestic fixed interest bond and income sectors;

• Old Mutual Global Equity Fund (A Class) – best foreign (SA domiciled) equity fund;

• Franklin Global Small-Mid Cap Growth Fund – best offshore global equity fund;

Personal Finance editor Bruce Cameron, mentions that the main purpose of the award is to recognise consistency of performance at the optimal level of risk. "When the awards were initiated 17 years ago, the only tool available to advisers and their clients was straight performance comparison tables,” he says, admitting that this was obviously dangerous because it led investors to chase the most recent top performer than be disappointed when that top performer was overtaken by another.

This led to the development of the PlexCrowns, which are the main Raging Bull awards, and which assess and rate funds according to different quantitative measures that are used in calculating investment performances in one number.

 

The PlexCrown rating system is a measure of consistency, because ratings are done over three and five years and are time-weighted, with the emphasis on the longer measurement period. Funds within a sub-category are ranked only if there are at least five funds in that sub-category with a track record of at least five years.

To qualify for a rating, a fund must have an official track-record of at least five years. Importantly, the PlexCrown fund ratings are based on quantitative measures, which means those who come out tops do so fairly and squarely – there’s no subjective assessment.

 

"In calculating risk-adjusted returns, the methodology accepts that various quantitative formulae each have their unique drawbacks. In order to overcome this, up to five different risk measures are used: total risk (Sharpe Ratio); downside risk (Sortino Ratio and Omega risk/reward measure); and manager’s skill (Jensen’s Alpha, Treynor),” says Cameron. "The research method ensures that the unit trust funds under evaluation are exposed to similar risks. The sub-categories for varied specialist funds and money market funds are therefore excluded.”

The Raging Bull awards rightly reward excellence in the industry, but investors still need to view these primarily as industry awards, not endorsements. Cameron rightly says that although the PlexCrowns separate poor performers from excellent performers, they are based on historical data and should simply be a first step in the construction of a unit trust portfolio. Investors and their financial advisers still need to do the hard work and assess risk appetite, financial goals and how much diversification is required before making a decision.