Investments  

The best-rated fund houses at the dawn of 2021

The best-rated fund houses at the dawn of 2021
 Credit: Chris Ratcliffe/Bloomberg

Liontrust has retained its position at the top of the best-rated fund houses table, with 17 of its 70-strong fund range bagging a ‘five-crown’ stamp from FE Fundinfo.

FE Fundinfo’s ratings rebalance showed Liontrust had secured the most five-crown ratings, followed by Baillie Gifford and Aberdeen Standard with 14 five-crown funds each.

T Rowe Price and Fidelity, both with 11 top ratings, made up the top five.

Baillie Gifford also performed well in terms of proportion of its fund range, with 14 of its 29 funds — or 49 per cent — receiving the data firm’s top accolade.

PGIM Funds (50 per cent), Comgest Asset Management (38 per cent) and Carmignac Gestiony (36 per cent), all with six funds with five crowns, were also high achievers on this metric.

Fund groups with seven or more funds with five-crown ratings
GroupNumber of 5-crown funds

% of fund range with 5 crowns

Liontrust1725%
Baillie Gifford1449%
Aberdeen Standard1411%
T. Rowe Price1129%
Fidelity1114%
Quilter Investors917%
Janus Henderson913%
Baring828%
Jupiter820%
JP Morgan815%
Sarasin728%
Allianz716%
Goldman Sachs716%

At the other end of the scale, FE Fundinfo said 109 funds had lost their five-crown rating since July 2020, with those using “traditional stocks” — such as financial services or energy — suffering in the fallout of the pandemic.

Within the sectors, the strong performance of US equities was reflected as the IA US Smaller Companies sector saw 30 per cent of its funds achieve a top accolade.

The IA UK Index Linked Gilts sector continued to perform well, with 29 per cent of its funds with five crowns, alongside IA Europe including UK, with 28 per cent.

Meanwhile, the drag on income funds continued to dampen performance, and just two of the IA UK Equity Income sector’s 83 funds gained a five-crown score.

To achieve five crowns, a fund must be in the top 10 per cent of the fund universe in terms of a 'crown score'. FE Fundinfo creates this score by assessing the fund's alpha, volatility and consistency against the fund's benchmark.

Charles Younes, research manager at FE Fundinfo, said: “2020 was for many a year of home-working, which brought about rapid change within the markets and clearly defined the winners and losers in the new Covid-19 environment. 

“Funds invested in technology stocks reaped the benefits, while those in traditional sectors such as energy and financial services not only suffered from the great sell-off in March last year, but also failed to capture the upside.”

New kids on the block

A fund requires at least a three year track record to get a rating and today’s results showed some 16 funds had been awarded the top marks as soon as they had passed the threshold. 

BMO was the high achiever in terms of young funds bagging the top rating as soon as they were eligible.

Among the newer funds given the five-crown ratings was the trio of BMO Universal MAP funds — Balanced, Cautious and Growth — as well as Blue Whale’s Growth fund.

Mr Younes said: “The Blue Whale Growth fund gained a five crown rating at the first time of asking and is definitely one to keep an eye on. 

“The manager, Stephen Yiu, along with his deputy Daniel Allcock, have adopted a similar successful approach to Terry Smith and performed admirably, returning more than 17 per cent  over the past year in very challenging conditions.”