MAY 2012 Group profiles


In the following pages, fund groups suggest how investors can best take advantage of present market conditions, while FE provides data on how some funds have posted above-average risk-adjusted returns


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n the second half of Invest, a number of fund management groups offer their ideas on how and why investors should get active in the current environment. Some are showcasing specific funds, others their fund range as a whole. We hope it provides some thought-provoking ideas that advisers can take to their clients.


Alongside these ideas are statistics and information provided by FE. Of particular interest are the group’s Crown Ratings. These seek to identify funds that have, over recent times, displayed superior risk-adjusted returns against a credible benchmark. They incorporate both alpha generation, consistency and volatility measures. This is not the same as simply identifying top-performing funds that may have got lucky through one or two stock positions, or through taking higher risk.


FE also identifies alpha managers. In uncovering these top performers, the group uses a similar methodology to the crown ratings and aims to identify the same qualities of successful stockpicking, consistency and risk management. FE constructs an artificial portfolio, as if an investor had bought and sold all of the manager’s funds during the period he/she has managed them to create a composite picture of their performance.


However, any ratings of this type are necessarily quantitative and backward-looking. Advisers therefore need to introduce qualitative measurements and comments, such as the quality of the processes by which a fund is managed, and the strength and track record of the fund manager and asset management group. We hope that these features go some way to identifying those qualities in the managers featured.


GROUP PROFILES


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