Allan Gray is back as SA’s top manager

[First published in Personal Finance, January 2017]

The 21st Raging Bull Awards were dominated by large and mostly independent fund managers, which walked off with the lion’s share of the awards.

Allan Gray made a significant comeback to collect the Raging Bull Award for the South African Management Company of 2016, winning the title for the fifth time for the returns it earned for you, its investors, across all its qualifying funds to the end of last year.

The company won the award for four years in a row until 2011, before falling to second place in the ranks of unit trust management companies for 2012 and 2013.

For 2014, Allan Gray fell out of the top three rankings altogether, before coming third for 2015.

Allan Gray also collected three certificates: for straight and risk-adjusted performance by its Global Fund of Funds, which invests across global asset classes, and for straight performance by its South African multi-asset fund that has a low exposure to equities.

The awards were held this week at a gala dinner at Summer Place in Johannesburg attended by almost 300 investment professionals. The Raging Bull Awards are hosted by Personal Finance in conjunction with its data providers, ProfileData and PlexCrown Fund Ratings.

Nedgroup Investments, which last year won the Raging Bull Awards for South African Management Company of 2015 and Offshore Management Company of 2015, maintained its position as the top offshore management company, but dropped to third position in the rankings of managers of South African funds.

Nedgroup Investments also claimed two Raging Bulls: for its Global Flexible (multi-asset) Fund and the Private Wealth Equity Fund, a Nedbank Private Wealth fund that is managed by Nedgroup Investments.

In addition, five of the asset manager’s funds received certificates. These were the Global Flexible Fund and its rand-denominated feeder fund, the Financial Fund, the (multi-asset medium-equity) Opportunity Fund (for straight and risk-adjusted performance) and the (multi-asset low-equity) Global Cautious Feeder Fund.

PSG Asset Management also made a remarkable comeback: from seventh position last year it clawed its way back up the ladder to second place, ousting another independent manager, Coronation Fund Managers, from its usual place among the top three managers.

Coronation ended in fourth place overall, although only the top three managers are recognised. Four of Coronation’s funds claimed certificates: the Industrial Fund, the Bond Fund (which won certificates for straight and risk-adjusted performance), the Jibar Plus (South African multi-asset income) Fund and the Global Capital Plus Fund (which invests in all asset classes around the world).

Another independent manager, Investec Asset Management, received the two special Raging Bull Awards that were handed out to mark the 21st anniversary of the awards. The special awards went to Investec’s Equity Fund for straight performance by a South African equity general fund over 21 years and to the Investec Managed Fund, for risk-adjusted performance by a South African multi-asset equity fund over 21 years.

Investec also won a Raging Bull Award for its Value Fund, which was the best performer over three years to the end of last year. The fund, managed by long-standing and much-revered value manager John Biccard, went through a four-year cycle of under-performing the FTSE/JSE All Share Index and its peers in the all-important South African equity general sub-category. But last year the fund came storming back with a return in excess of 60 percent, bringing long-term investors relief and proving that those investors who pick a fund with a strong style bias need to have the conviction to stick with their managers through the cycles that come with style investing.

The management company of the year award is based on the overall risk-adjusted performance of all a company’s funds in unit trust sectors that consist of five or more funds with a performance history of at least five years to the end of 2016.

Raging Bull Awards are given to top performers in the largest unit trust sub-categories by assets under management. The awards for straight performance are made on the basis of three-year returns, while risk-adjusted awards are made on the basis of returns over three and five years weighted towards the long term.

More than 40 certificates are awarded to winners of straight and risk-adjusted performance in all qualifying sub-categories.

Only two boutique managers, Centaur and Contrarius, won a Raging Bull Award this year.

Centaur’s Flexible Fund received the award for risk-adjusted performance in the South African multi-asset sub-category, where there are no restrictions on how much a fund manager can hold in a particular asset class.

Contrarius’s Global Equity Fund was the top-performing offshore FSB-approved fund in the global equity sub-category.

Prescient led the South African fixed-interest sector, where its Income Provider Fund captured the Raging Bull Award for top performance among bond, income and multi-asset income funds. The Income Provider Fund also received the certificates for the best multi-asset income fund on straight and risk-adjusted performance.

NFB, the asset manager within the NFB Financial Services Group, won the Raging Bull Award for the best multi-asset fund despite being in the multi-asset low-equity sub-category, where funds’ equity exposure is limited to 40 percent.

Old Mutual’s Global Equity Fund continued to dominate in the rand-denominated global equity sub-category, winning its fifth Raging Bull Award in a row.

The Raging Bull Awards were established in 1997 to honour the managers of funds that consistently earn good returns for South African retail investors.


South Africa’s top asset manager doesn’t have any great investment secrets that enabled it to beat its peers and win this year’s main Raging Bull Award. In fact, its winning recipe is very straightforward. It consistently adheres to its long-standing investment philosophy to deliver superior returns to its investors, and everything it does is centred on achieving that goal.

“We simply use our analysis of the fundamentals of a business to determine its underlying worth. We then compare this with the price the market places on this (the share price). If we can buy the shares of the business for a lower price than we believe they are worth, we will do so,” Jeanette Marais, the director of distribution and client service at Allan Gray, says.

“We sell the shares when they reach our estimate of fair value, and look to buy others trading below intrinsic value. This investment philosophy and process has seen us through triumph and turmoil over four decades of investing.”

Allan Gray’s investment philosophy is known in the industry as valuation-based: the manager considers the price of a share, bond or listed property stock relative to its expected future earnings.

Marais says Allan Gray is honoured to have won the Raging Bull Award for South African Management Company of the Year, but winning awards is not the manager’s focus. “We always say that past performance is not necessarily a guide for the future, and investment decisions should be based on thorough research, not only on award winners,” she says.

The Raging Bull Awards for straight performance provide investors with an indication of how well a fund has performed in the past, but you cannot rely solely on past performance when choosing a manager that will deliver out-performance in the future.

The Raging Bull Awards for risk-adjusted returns are based on a longer period – up to five years – and consider a manager’s consistency of returns. You should want to find a fund that consistently produces good returns, because this provides you with some indication that the manager has a sound and repeatable investment philosophy, and didn’t just get lucky.

Risk-adjusted returns help you to identify managers that take calculated risks to deliver good returns consistently over longer periods, as against managers that take risks to bolster returns over the short term. But even taking risk-adjusted returns into account is not a fail-safe way to pick a good fund or manager.

A better acid test is to ask: is it likely that the asset manager will be doing the same thing in 10 years’ time, Marais says. To answer this question, you should consider the incentives the manager offers its key investment professionals, how its business is structured, the stability and experience of the investment team, and evidence of investment conviction, she says.

These types of questions avoid the natural inclination to focus on past performance, whereas it is the future that matters, Marais says.

The winners of the Raging Bull Awards profiled in this edition provide you with a good indication of what the best-performing funds can offer, but finding the fund that is right for you may take more than just learning about its winning strategy.

A good financial adviser can help you to pick the right fund for your needs. This depends on what return you need from your investment, how long your will be invested and your ability to withstand risk.


South African managers

1. Allan Gray: 4.393
2. PSG: 4.276
3. Nedgroup Investments: 3.739
4. Coronation: 3.654
5. Prudential: 3.589
6. Investment Solutions: 3.277
7. SIM: 3.269
8. Old Mutual: 3.157
9. Investec: 3.155
10. Momentum: 3.110
11. Discovery: 3.076
12. Absa: 3.033
13. Stanlib Multi-Manager: 2.934
14. Marriott: 2.802
15. Stanlib: 2.789
16. Prescient: 2.732
17. Oasis: 2.496

Offshore managers

1. ACPI: 4.500
2. Nedgroup Investments: 4.250
3. Oasis: 3.750
4. PineBridge: 3.750
5. Investec: 3.500
6. Investment Solutions: 3.250
6. Orbis: 3.250
8. Marriott: 3.000
8. Coronation: 3.000
8. Schroder International: 3.000
11. Sarasin: 2.875
12. Momentum: 2.750
13. Lloyds: 2.611
14. Franklin Templeton: 2.569
15. M&G: 2.500
16. Sanlam: 2.375
17. PSG: 2.250
18. Stanlib: 2.222
19. Ashburton: 1.667


The Raging Bull Awards recognise the stars of the unit trust industry in terms of top outright (or straight) performance, best risk-adjusted performance and best performance by unit trust management companies.

The awards cover domestic funds (South African-domiciled) and offshore funds (non-South African-domiciled funds approved by the Financial Services Board, or FSB).Awards for asset-specific sectors are based mainly on straight performance calculated by ProfileData. For multi-asset sectors, where risk-management is a major factor, awards are based on the PlexCrown Fund Ratings.

The following criteria determine whether a fund is eligible for an award:

  1. Funds must have been available directly to retail investors for at least one year for risk-adjusted performance, and three years for straight performance, to be eligible for awards and certificates.
  2. For awards for straight performance by domestic funds (including South African-domiciled foreign funds), sectors are included if they have at least five actively managed funds with a history of three years or more.
  3. For awards for straight performance by offshore funds, sectors are included if they have at least five actively managed funds with a history of three years or more.
  4. Risk-adjusted awards are presented in the major domestic and offshore multi-asset sectors and the larger Assocation for Savings & Investment South Africa (Asisa) sectors. Domestic and foreign (South African-domiciled) sectors are included if they have at least five actively managed funds with a history of five years or more.
  5. Passive funds are excluded, because their performance reflects market movements rather than fund manager expertise.
  6. Awards are not made to money market funds because of the limitations on them in terms of duration and the types of instruments allowable.
  7. Awards are not made to Fundisa funds, because the nature of these funds does not make them comparable to other funds in their sector.
  8. Awards are not made to funds in the Asisa “unclassified” sub-category, because their mandates and investment objectives are not necessarily comparable.
  9. Funds that have changed sub-categories during the past year (even if they have been allowed by Asisa to retain their performance history) are not eligible for sector-specific awards.
  10. To be eligible for an award or certificate, an offshore fund must have been registered with the FSB for at least three years. Funds that do not qualify for awards are also excluded from the calculation of the Offshore Management Company of the Year.
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