Money Observer’s Fund Awards 2019 shortlist

We reveal the funds that have made it on to our annual awards shortlist, and introduce a new award.

June 3, 2019

The annual Money Observer Fund Awards take place this month, and the 2019 winners will be announced on Thursday 27 June. This year, we have a new award - the Volatility Aware Award.

An explanation of how the awards are won, and details of our methodology, can be found below the shortlist.

Here are the 2019 nominees.

UK Equity Income

Best Larger Fund nominees
Franklin UK Equity Income
Man GLG UK Income 
Neptune Income
Schroder Income
Schroder Income Maximiser

Best Smaller Fund nominees
Aberdeen UK Equity Income 
Allianz UK Equity Income
Investec UK Equity Income
Lazard Multicap UK Income
UBS UK Equity Income  

UK Smaller Companies

Best Fund nominees
Cavendish AIM
Jupiter UK Smaller Companies
Marlborough Nano Cap Growth
Merian UK Smaller Companies
TB Amati UK Smaller Companies

UK Equity Growth

Best Larger Fund nominees
Aviva Investors UK Eq Manager of Managers
Baillie Gifford UK Equity Alpha 
Castlefield CFP SDL UK Buffettology
LF Lindsell Train UK Equity
Liontrust Special Situations
Man GLG Undervalued Assets
MI Chelverton UK Equity Growth  

Best Smaller Fund nominees
Aberdeen Responsible UK Equity
MFM UK Primary Opportunities

Schroder Responsible Value UK Equity
Slater Recovery
Unicorn UK Growth 

Sterling bonds

Fidelity Global High Yield
Royal London Sterling Extra Yield Bond
Sanlam Strategic Bond
Schroder High Yield Opportunities
Schroder Sterling Corporate Bond

Property

Best UK fund
BMO UK Property
L&G UK Property  

Best Global fund
Fidelity Global Property
Schroder Global Cities Real Estate 

North America

Baillie Gifford American B Acc
Investec American Franchise
JPM US Small Cap Growth
T. Rowe Price US Blue Chip Equity
T. Rowe Price US Large Cap Growth

Mixed Asset Higher Risk

BMO Multi-Manager Investment Trust
LF Miton Worldwide Opportunities
Liontrust Sustainable Futures Managed
M&G Fund of Invest Trust Shares 
Royal London Sustainable World
TB Wise Multi-Asset Growth

Mixed Asset Lower Risk

Barclays Wealth Global Markets
LF Seneca Diversified Income 
Liontrust Sustainable Futures Defensive Managed
Kames Diversified Monthly Inc
Royal London Sustainable Diversified

Japan

Baillie Gifford Japan Small Cos
Baillie Gifford Japanese
First State Japan Focus 
Invesco Japanese Smaller Companies 
Lindsell Train Japanese 

Global Equity Income

Baillie Gifford Global Inc Growth
Guinness Global Equity Income
JPM Global Equity Income
M&G Global Dividend
Merian Global Eq Inc (IRL) 
Overstone Global Equity Income

Global Emerging Markets

Baillie Gifford Emerging Mkts
Baillie Gifford Em Mkts Lead Coms  
BlackRock Emerging Markets 
JPM Emerging Markets 
UBS Global Emerging Markets Equity c

Global Bonds

Investec SIV EM Blnded Debt
Man GLG Corporate Bond
M&G Emerging Markets Bond GBP I Acc
M&G Global Government Bond
Threadneedle EM Local Currency

Global Growth

Best larger and smaller fund nominees
Artemis Global Select
AXA Framlington Global Thematics 
Baillie Gifford Global Discovery
BMO Sustainable Opportunities Global Equity
Fundsmith Equity
Investec SIV Global Franchise 
Lindsell Train Global Equity
Threadneedle Global Extended Alpha 
T. Rowe Price Global Focused Growth
T. Rowe Price Global Growth 

Europe

Aberdeen European Equity 
Aberdeen European Smaller Companies
Janus Henderson European Smaller Companies
Jupiter European
LF Miton European Opportunities

Asia Pacific

BMO Pacific Equity
Fidelity Asian Dividend
Fidelity Asia Pacific Opps
JPM Asia Growth
Schroder Asian Alpha Plus 

Volatility focus

Architas MA Passive Interm A Acc
HSBC Global Strategy Dynamic C Acc

L&G Multi-Asset Target Return I Acc
Man GLG Alpha Select Alt IL GBP Acc

Newton Multi-Asset Divers Ret Inst W Acc
Smith & Williamson Defensive Growth B

Ethical/SRI bond 

Rathbone Ethical Bond
Liontrust Sustainable Future Corporate Bond 

Royal London Sustainable Managed Income 
JPM Sterling Corporate Bond

SLI Ethical Corporate Bond 

How Money Observers 2019 Fund Awards are won

Methodology

Contenders

  • Funds, including offshore-domiciled funds, must be members of an Investment Association (IA) sector and offer a sterling or hedged to sterling share class. All charity, exempt, institutional and private funds are excluded, as are all passive index- tracking funds.
  • Each fund must have at least £15 million of assets under management (AUM) as at 31 March 2019 and have at least a three-year qualifying history (no breaks in its history due to any material change in fund structure, objectives or governance). Contenders for best smaller fund awards are those with AUM of £15 million to £150 million. Contenders for best larger fund awards are those with AUM of £150 million-plus.
  • Awards are assessed within specified IA sectors. UK equity growth, UK equity income, Global equity income and property categories are assessed by also referencing Morningstar sectors.
  • For these awards we assess the most relevant private investor share class to measure performance. This is the Investment Association’s primary share class: the highest-charging unbundled share class freely available in the retail market.

Quantitative methodology

Data for the awards was provided by data provider Morningstar. Charts accompanying the awards profiles were sourced from FE Analytics.

The filtering process

The funds are ranked from best to worst across two main measures.

First, an overall average is calculated by weighting the first and oldest discrete year with 20% (to 31 March 2017), second discrete year with 30% (to 31 March 2018), third most recent discrete year with 40% (to 31 March 2019) and the three-year total return with 10%.

Second, risk-adjusted returns are analysed over three years to 31 March 2019, as defined by the Sharpe ratio. This measure calculates the level of a fund’s return over and above the return of a notional risk-free investment (in this case the ICE GBP Libor 1 Month index). The difference in returns is then divided by the fund’s standard deviation – its volatility, or risk measurement.

Contenders are then filtered to include only those funds which maintained themselves in one of the top three quartiles in their sector for each of the last three years across the following measures:

– three discrete annual periods of one-year risk-adjusted returns, as per Sharpe ratio;

– three discrete annual periods of relative performance versus the fund’s IA sector.

This filters out weak performance, either in terms of weak risk-adjusted returns or weak returns relative to the fund’s sector.  

Socially conscious fund awards

Morningstar defines a socially conscious fund thus: funds that make investments based on such issues as environmental responsibility, human rights, or religious views. A socially conscious fund may take a proactive stance by selectively investing in, for example, environmentally friendly companies, or firms with good employee relations. This group also includes funds that avoid investing in companies involved in promoting alcohol, tobacco, or gambling, or in the defence industry.

Using the same filtering process as above, contenders are derived from the following IA sectors: equity – any equity-oriented sector; mixed asset – the three mixed investment sectors; bond – UK corporate and UK strategic bond sectors.

Volatility-Aware Award

For this new award, funds in the Targeted absolute return and Volatility managed sectors were assessed. Contenders are first ranked by their annualised three-year volatility. The winning fund (after satisfying other quantitative and qualitative measures) has the best return among funds in the first quartile of volatility (ie the lowest volatility). The highly commended fund comes from funds in the second quartile of volatility.

Qualitative aspects

  • Fund manager’s tenure. We favour those with a history of at least three years managing the fund.
  • Access to the fund by a wide spectrum of retail investors, thus excluding ‘soft-closed’ funds which could levy an initial fee.
  • The fund’s strategy broadly tallies with retail investors’ expectations for the award category.
  • Where a fund’s three-year performance (after satisfying the filtering requirements) is significantly superior to another fund with a better three- year Sharpe ratio, Money Observer may favour the higher-performing fund if its Sharpe ratio is not significantly lower.

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