Is Allan Gray on course to scooping the Raging Bull Award for South African Management Company of the Year?
Is Allan Gray on course to scooping the Raging Bull Award for South African Management Company of the Year? The asset manager has been ranked number one every quarter this year in the PlexCrown survey, which is used to determine the winners of the annual Raging Bull Awards, the most sought-after accolades for South African fund managers.
At this year’s Raging Bull Awards ceremony, Allan Gray was named the third-best domestic management company of 2015. Nedgroup Investments became the first management company in the 20-year history of the awards to walk off with the Raging Bulls for both South African Management Company and Offshore Management Company.
But Nedgroup Investments could not savour its triumph for long: Allan Gray ousted it from first place in the domestic company rankings in the first quarter of this year. The last time Allan Gray was ranked number one was in the fourth quarter of 2013. It then slipped down the rankings, languishing in sixth position for two quarters. The company shot into second place in the third quarter of 2015 and was ranked third in the fourth quarter.
Allan Gray’s comeback at the beginning of this year wasn’t a flash in the pan: it has retained its top spot in the quarters to June 30 and September 30. The investment house is a four-time winner of the coveted domestic management company award. The who’s who of the asset management industry will be at the awards ceremony on January 25, 2017 to see whether Allan Gray takes it for the fifth time.
The quarterly PlexCrown survey rates collective investment schemes and scheme managers based on the risk-adjusted returns of their funds. The PlexCrown ratings take into account consistency of performance and the risk that a fund manager takes when investing, with managers scoring higher for good returns at low risk. Funds are rated from one to five PlexCrowns.
In the latest PlexCrown survey, to September 30, six of Allan Gray’s eight funds that qualify to be included in the PlexCrown rating system obtained an above-average rating of four or more PlexCrowns.
PSG jumped from seventh in the second quarter to second place. Ryk de Klerk, an executive director of PlexCrown Fund Ratings, says this was largely a result of a decision to use the performances of the “clean” classes of PSG Wealth’s funds.
The prices of some A-class funds include an annual fee paid to a financial adviser, and are not “clean”, and the funds are at a disadvantage when returns and ratings are calculated. As a result, De Klerk says, a rule of the PlexCrown rating system has been amended so that, if an advice fee paid to a financial adviser is included in the pricing of an A-class fund the following applies:
- If the A-class fund is the only class available to retail investors, the A-class fund’s returns will be used; and
- If another class that does not include fees paid to advisers is available to retail investors (the pricing is “clean”), the returns of the “clean” class fund will be used, provided the fund has a performance history of at least five years. If it does not, the returns of the A-class fund will be used.
Ten of PSG’s 15 qualifying funds had above-average ratings of four or more PlexCrowns.
Nedgroup Investments slipped from second to third place. Thirteen of Nedgroup Investments’s 20 rated funds had above-average ratings.