To qualify for a Raging Bull Award or certificate, or for a PlexCrown rating, a unit trust fund must:
- Be open to retail investors;
- Not be a passive or index-tracker fund;
- Not be a money market fund;
- Not be in a varied specialist sub-category or in the domestic asset allocation targeted absolute and real return sub-category where mandates differ widely;
- Not have changed sub-categories during the past year;
- In the case of an award made on the basis of straight performance, be in a domestic unit trust sub-category (including South African-domiciled foreign funds) that has at least five actively managed funds with histories of three years or more;
- In the case of an award made to a foreign-domiciled (non-rand-denominated) fund on the basis of straight performance, be in a sub-category that has at least six actively managed funds with histories of three years or more;
- In the case of an award made on the basis of risk-adjusted returns, be in a major asset allocation sub-category, or in one of the other larger sub-categories. Sub-categories that have at least five actively managed funds with histories of five years or more are included in the awards;
- In the case of offshore funds, have been registered with the Financial Services Conduct Authority for at least three years;
- The following funds do not qualify for a PlexCrown Fund Rating: unclassified funds; gold and precious metal funds; funds in a sub-category that consists of less than five funds; funds with a performance history of less than five years; pure index-tracking funds; and money market funds.
Funds in the South African equity general and the equity general large-cap sub-categories that track indices but make use of investment methodologies to enhance performance are rated with other funds in their sub-categories.
Funds in the FSCA approved global asset allocation prudential and flexible sub-categories are included in the broader global asset allocation category for the purposes of the award for the global asset allocation fund and the offshore manager of the year awards.
Where a fund has more than one class, the returns of the higher-cost A-class fund are used to measure its performance.
Funds in the non-multi-asset and the interest-bearing variable-term sub-categories are ranked on a percentile basis over five- and three-year periods according to the Sharpe Ratio, Alpha, Treynor Ratio, Sortino Ratio and Omega. Funds in the multi-asset sub-categories (excluding multi-asset income) are ranked over five- and three-year periods according to the Sharpe Ratio, Alpha, Sortino Ratio and Omega.
Funds in the multi-asset income and the interest-bearing short-term sub-categories are ranked over five- and three-year periods according to the Sharpe Ratio, Alpha and Sortino Ratio.The funds’ percentile rankings per measure over three and five years are time-weighted by applying weights of 40% and 60% respectively. The total percentile rankings of funds in the non-multi-asset and the interest-bearing variable-term sub-categories are then calculated by applying a weight of 20% to each fund’s percentile rankings per measure.
In the multi-asset sub-categories (excluding multi-asset income), a weighting of 25% is given to the four performance measures: the Sharpe Ratio, the Sortino Ratio, Alpha and Omega. In the multi-asset income and the interest-bearing short-term sub-categories, a weighting of 33.33% is given to the three performance measures: the Sharpe Ratio, the Sortino Ratio and Alpha.The fund with the highest weighted percentile ranking is therefore the winner in its sub-category.
- Eight Raging Bull Awards are for individual unit trust funds.
- Four awards are made on the basis of straight performance over three years:
South African equity general;
South African interest-bearing (interest-bearing short-term and variable-term sub-categories and the multi-asset income sub-category);
(Rand-denominated) global equity general; and
Offshore global equity (foreign-domiciled funds approved by the Financial Sector Conduct Authority).
- Four awards are made on the basis of risk-adjusted returns, as measured by PlexCrown Fund Ratings, over periods up to five years:
South African equity general;
South African multi-asset flexible;
South African multi-asset (incorporating the low-, medium- and high-equity sub-categories)
Offshore global asset allocation (foreign-domiciled funds approved by the Financial Sector Conduct Authority).
- The most coveted award, for the South African Manager of the Year, is made on the basis of an average PlexCrown rating that measures risk-adjusted returns and consistency of performance across all of a manager’s qualifying funds for periods up to five years.
PlexCrown Fund Ratings assigns each qualifying fund a score based on the fund’s risk-adjusted performance, which is calculated using three to five different measures (depending on the sub-category), over three and five years.
The size of the fund – or assets under management – relative to the combined size of all a company’s rated funds in a broad asset class or unit trust sector, is used to calculate the fund’s effective weight when determining an average score for the manager in that asset class or sector. The company’s average rating for the asset class or category is then calculated using these weighted ratings for the manager’s funds in a specific asset class or major category.
PlexCrown Ratings has determined fixed weightings for the four broad unit trust sectors based on the assets under management in these sectors and the skill involved in managing funds in them. These weightings are used when manager’s average scores in the four broad unit trust sectors or asset classes, are averaged to obtain a total score. The weightings are: South African equity and real estate weight, 25%; South African interest-bearing (including multi-asset income), 25%; South African multi-asset (excluding multi-asset income), 35%; and rand-denominated global and worldwide, 15%.
- Certificates are awarded to the runners-up in second and third place in the domestic management company rankings.
- There is also an Award for the Offshore Manager of the Year. The award is made on the basis of a manager’s average PlexCrown rating for the management of foreign-currency funds domiciled outside of South Africa but which the FSCA has approved as suitable for South African investors.
The returns of the FSCA approved offshore funds are measured in US dollars, and the hurdle rate used to determine the PlexCrown rating is the US three-month Treasury Bill rate.
To qualify for an overall rating, a management company must have at least one fund in the global equity general sector or the global asset allocation (flexible and prudential combined) sector and at least three funds that qualify for a PlexCrown rating.