Market rotations see seven funds gain 5-Crown rating at the first time of asking

Charles Younes added:

“Overall it has been a good year for infrastructure focused funds and for cyclicals like the financial sector. The reorganisation of the IA sectors provides a more granular level for investors to gauge performance. Where before these high-performing funds were grouped with a wide range of funds with strategies and structures, their performance may have gone unnoticed, but now are able to demonstrate their value.”

Across the different groups meanwhile, abrdn once again had the highest number of 5-Crown rated funds within its stable at 17, followed by BlackRock and Liontrust with 16 and 12 respectively. Falling out of the top ten meanwhile were Baillie Gifford, whose stable of 5-Crown rated funds fell from 9 last year to 4 this year. 

Charles Younes added:

“Within the groups, Baillie Gifford has gained a lot of attention in recent months, having gone through a period of underperformance, after a highly-successful 2020. But once again, this is largely due to market shifts, rather than any fundamental changes within management style, or the holdings they typically own as a group. We remain confident in their approach, which has been consistent throughout and many of the companies they have invested in continue to grow. We haven’t seen any evidence of poor choices in their stock picking so are anticipating stronger performance in the next Crown rebalance in July.”

*Percentages have been rounded up to the next whole number 

Methodology

FE fundinfo Crown ratings are calculated by building up a ‘Crown Score’. The score is made up of three parts, and each part is calculated by reference to a benchmark for the fund. Once the benchmark is assigned, FE fundinfo then applies three tests (an alpha based test, a volatility score and a consistency score) to the total return history of the fund. Three years of history is required to carry out these scores, so any fund with less history than this will not qualify for a rating.

Funds are assigned ratings based on their total scores, according to the following distribution:

• the top 10% – 5 FE fundinfo Crowns
• the next 15% – 4 FE fundinfo Crowns
• the next 25% – 3 FE fundinfo Crowns
• the next 25% – 2 FE fundinfo Crowns
• the bottom 25% – 1 FE fundinfo Crown

Charles Younes added: “Crown ratings offer investors an opportunity to compare and contrast the performance of a fund over an extended period of time and throughout different market conditions. Over the past year, as the pandemic, rising inflation and an increase to interest rates have caused uncertainty in the markets, the Crown ratings provide a transparent and in-depth quantitative analysis of the global funds market.”