FE’s latest bi-annual Crown ratings rebalance awarded 325 funds with the highly prized five FE Crowns – with 45 funds jumping more than two Crowns to achieve the top accolade.

• North America and Global funds fail to pick up five FE Crowns
• Europe fertile ground for managers
• F&C see biggest positive ratings shift

The rebalance has also seen significant movement in several sectors, with 308 funds gaining or losing at least two FE Crowns – the highest level recorded since July 2012.

The Mixed Investment 40%-85% Shares sector has seen the largest proportion of these changes, with 37 funds either losing or gaining more than two Crowns. This is followed by UK All Companies (36) and the Flexible Investment and Mixed Investment 20%-60% Shares (33 each).

The Specialist sector has taken home the lion’s share of five FE Crowns this rebalance, with 26 funds awarded the top prize, followed by Mixed Investments 40%-85% with 20 and All Companies with 17.

No North American or Global Equity Income fund holds a five FE Crowns rating, FE can reveal. This is a far cry from the Europe Ex UK sector, where some 50 per cent of funds account for four or five FE Crowns – 27% have four Crowns and 20% have five Crowns.

Global Equity Income no five Crowns funds

Global sector struggles with very few four or five Crowns see stats below

Rob Gleeson, head of FE Research, says: “There is no clear direction for the markets – most of the market movements have been events driven and due to short-term noise. It is the managers who are able to ignore all the noise who will most likely benefit in the longer term.

“In the case of North America, yet again we see very few highly rated equity funds. While this can add fuel to the whole debate on whether active managers show value in that market or not – it has undoubtedly got harder to keep spotting cheap stocks, as valuations as a whole have risen.

“Europe, on the other hand, has been fertile ground compared to North America.”

On a group level, Fidelity tops the board with the highest number of five FE Crowns-rated funds at 13, followed by F&C with 11 and Newton Asset Management with 10. These three fund groups have knocked Standard Life Investments, Premier Asset Management, Invesco Perpetual Fund managers and Henderson Global Investors from the top spot over the past six months – these four groups previously boasted 11 five FE Crowns-rated funds each.

Although Fidelity is on top overall, F&C has seen the biggest shift in funds moving to the top spot – with four funds moving into five FE Crowns from one or two FE Crowns. (Please see attached spreadsheet for fund specifics.)

Nine funds have gone from a single Crown each to five Crowns – including the top quartile fund over the past three years, Old Mutual Henderson China Opportunities.

The rebalance also saw 12 previously unrated funds (due to a lack of three-year history) jump straight to the highest rating of five Crowns.

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.

Previously unrated to five FE Crowns