Oliver Clarke-Williams, Portfolio Manager at FE Investments, comments:
“As the economy reopens, we can expect to see further rotational shifts within the market. Those equity funds which were riding the crest of the technology boom seen during lockdown will increasingly find it hard to replicate their outstanding performances over the past 18 months. In today’s climate, investors are looking for funds to generate income and are hunting yield wherever possible. Over the past six months the bond markets have been one of the few places to offer these pockets of yield, so for many investors, it will be pleasing to see so many bond-orientated funds performing so well.”
Across the different groups meanwhile, ABRDN had the highest number of 5-Crown rated funds within its stable at 16, followed by BlackRock and Liontrust with 13 each and Fidelity with 12.
| Group | Number of funds | Number of five Crown funds | % of five Crown funds* | |
| ABRDN | 144 | 16 | 12% | |
| Liontrust | 58 | 13 | 23% | |
| BlackRock | 102 | 13 | 13% | |
| Fidelity | 88 | 12 | 14% | |
| Baring | 28 | 11 | 40% | |
| Jupiter | 73 | 10 | 14% | |
| Baillie Gifford | 30 | 9 | 30% | |
| Sarasin | 22 | 8 | 37% | |
| Allianz | 31 | 8 | 26% | |
| Quilter | 54 | 8 | 15% | |
| JP Morgan | 57 | 8 | 15% | |
| Valu-Trac | 74 | 8 | 11% | |
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, Research Manager, adds:
“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 18 months as the Covid-19 pandemic has caused extreme volatility in the markets, the Crown ratings provide a transparent and in-depth quantitative analysis of the global funds market.”
