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The best-rated fund houses amid the pandemic

The best-rated fund houses amid the pandemic

Liontrust has topped the table in FE Fundinfo’s latest crown ratings as 13 of its 44-strong fund range bagged a ‘five-crown’ stamp.

FE Fundinfo's ratings rebalance, published today (July 20), showed the FTSE 250 fund house had received the most five-crown ratings, followed by T. Rowe Price and Aberdeen Standard with 11 five-crown funds each.

BlackRock and Morgan Stanley made up the top five, with 10 and 9 five-crown ratings respectively.

Morgan Stanley performed the best in terms of proportion of its fund range, with 9 of its 16 funds - or 56 per cent - receiving the fund data firm's top accolade.

Baillie Gifford and Architas were also high achievers on this metric, with 27 per cent of Baillie Gifford’s 34 funds and 23 per cent of Architas’ 35-strong range being awarded five-crowns.

GroupNumber of five Crown fundsNumber of funds% of five Crown funds
Liontrust134429.5%
T. Rowe Price113928.2%

Aberdeen Standard

111139.7%
BlackRock101287.8%
Morgan Stanley91656.3%
Sarasin93030%

Baillie Gifford & Co Ltd

93426.5%

Fidelity International

9929.8%
Valu-Trac9959.5%
Architas83522.9%
Jupiter84816.7%
AXA85514.5%

Funds from traditionally smaller groups were the “surprise performers” amid the volatile market conditions caused by the coronavirus pandemic in terms of young funds bagging the top rating as soon as they were eligible.

A fund requires at least three years of history to ascertain a rating and today’s results showed some 14 funds had been awarded the top marks as soon as they had passed the threshold. 

Among the newer funds given the five-crown ratings was the SDL Free Spirit fund, Brown Advisory’s US Sustainable Growth fund and the Man GLG Absolute Value portfolio.

Sophie Meatyard, analyst at FE Investments, said: “Stock picking by the [Brown Advisory] team has been a consistent driver to the fund’s returns. 

“This combined with positive sector allocation – overweight technology and healthcare – has been reflected in the five-crown rating awarded.”

At the other end of the scale, FE Fundinfo said the pandemic had caused 230 funds to lose their five-crown ratings.

Charles Younges, research manager at FE Investments, said: “Many funds which have previously done well have suffered this time around by misjudging their timings when it came to the sell-off in March. 

“One example of this is Man GLG’s Strategic Bond fund, which unfortunately has been one of the worst-performers in its sector.”

In terms of sectors, the IA UK Index Linked Gilts sector had the largest proportion of funds with five-star ratings with three of the eight funds in the sector (or 38 per cent) awarded the top marks.

The IA North American Smaller Companies and the IA Europe Including UK sectors were the next best performers, with 31 per cent and 24 per cent of each sector respectively receiving five-crown ratings.

SectorNumber of fundsNumber of five Crown funds% of five Crown funds

IA UK Index Linked Gilts

8337.50%

IA North American Smaller Companies

16531.30%

IA Europe Including UK

461123.90%

IA North America

1292418.60%
IA Global2794917.60%

IA Global EM Bonds - Blended

14214.30%

IA Short Term Money Market

7114.30%

IA China/Greater China

36513.90%
IA Global Bonds1562012.80%

IA Europe Excluding UK

1021312.70%

Oliver Clarke-Williams, portfolio manager at FE Investments, said: “The recent performance of some sectors is perhaps counterintuitive to what we might expect given the difficult markets. 

“Index linked gilts are traditionally seen as a very difficult asset class for managers to differentiate themselves in and provide outperformance as their investment universe is so small.”

Mr Clarke-Williams said it was a similar case for the two North American sectors, sitting second and fourth on the list, given the assumption you cannot outperform the US market.