Big changes in ratings and research firm FE’s latest Crown ratings rebalance as the market turmoil of the last two quarters of 2015 take effect on big name funds.
FE’s latest bi-annual Crown ratings rebalance awarded 345 funds the highly-prized five FE Crowns – with 45 funds jumping more than two Crowns to achieve the highest rating.
The rebalance has uncovered significant changes in Crown ratings within some of the UK’s more popular funds. The IA UK All Companies sector has seen a large proportion of these changes with 35 funds either losing or gaining more than two Crowns.
Standard Life Investments, Premier Asset Management, Invesco Perpetual Fund managers and Henderson Global Investors topped the board with the most 5 Crown rated funds – each boasting eleven 5 Crown rated funds.
F&C and First State Investments also ranked highly with ten 5 Crown rated funds each.
Six funds have gone from 1 Crown each to 5 Crowns – including the high performing Lindsell Train Japanese Equity fund, MFM Slater Recovery and Marlborough European Multi Cap funds.
The rebalance also saw 13 previously un-rated funds (due to a lack of 3-year history) jump straight to the highest rating of 5 Crowns.
Research manager, Charles Younes of FE Research says: “The new ratings reflect an uptick in the number of cautious or defensive funds gaining Crowns, with them having generally outperformed their benchmarks over the past few years.
“Looking ahead, in this low growth-low inflation environment, structural growth and high cash yield stocks should continue to perform well. And I imagine a lot of the funds which have achieved the higher Crown ratings will continue to rate highly.”
Fund of fund managers’ second most widely held fund from last year, according to FE Trustnet research published at the start of this month, Majedie UK Equity fund has dropped from 5 Crowns to three, as has the popular JOHCM UK Equity Income.
Managing director of ratings and research agency, Michael Holland observed that the volatility in the markets over the past six months have underlined the outperformance of growth funds over value funds, with the latter generally struggling in the face of continuous market upheaval.
He says: “Worries over China’s economic slowdown, a dive in commodity prices and geo-political issues have all affected investor sentiment and thus translated into market chaos.”
FE’s Crown ratings evaluate funds according to alpha generation, volatility and the consistency with which they have beaten their benchmarks over the past three years.
The new ratings also mark the inaugural use of clean share classes towards fund ratings for FE’s Crown, as announced.
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