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Winners of the 2009 Morningstar UK Fund Awards

These funds and fund houses have demonstrated long-term strength that helps investors achieve success.

Jackie Beard, FCSI 17 April, 2009 | 8:38AM
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Morningstar UK Fund Category Awards 2009
Many of you have participated in our online Fund Category Awards Poll, and will therefore be familiar with the new Morningstar Fund Awards programme. If you're not, you can click here for all the details (for the official methodology, click here), but suffice it to say that our overwhelming objective has been to recognise those funds that had good performance in 2009, but--most importantly--that also delivered strong risk-adjusted returns for investors over the long haul, relative to appropriate benchmarks.

We know that there's often interest in who has fared best over a given year or three years, but such figures are often very poor predictors of who will do well in the future. We therefore focused on one-, three-, and five-year performance, looking at how funds fared relative to their Morningstar Category peers, after adjusting for risk. To adjust for risk, we used the Morningstar Risk measure, a state-of-the-art measure which uses utility theory to penalise funds more for downside variation in returns than for upside volatility--in keeping with actual investor concerns.

We eliminated all institutional share classes from consideration for the awards, as these really are intended to help guide investors towards the best managers in their respective spaces. If a manager is good, he or she ought to be able to outperform even when carrying a full retail total expense ratio. Finally, our fund analysts employed a qualitative overlay to ensure that our choices hadn't suffered from major changes that might be expected to cause their future ability to outperform to differ markedly from the past. This meant, for example, that we did not select Rensburg Corporate Bond as the winner in the Sterling Corporate Bond category as former manager John Anderson left the group earlier this year.

So without further ado, here are the winners for the 2009 Morningstar Fund Category Awards. We won't detail each fund here, but investors will notice a common thread: From Cazenove’s Chris Rice to First State's Angus Tulloch, Jonathan Asante and Martin Lau, many of the funds selected exhibited a fundamentally-oriented, long-term approach to investing, and a willingness to go against the crowd. That's no accident: following the herd is rarely a recipe for success, whilst original research and the courage to back your ideas with significant assets is often what sets the very best managers apart from the pack.

Winners of the Morningstar UK Fund Category Awards 2009
Award Fund Name
Best UK Large-Cap Equity Fund Award 2009 Newton UK Opportunities GBP Inc

Best UK Mid-Cap /All-Cap Equity Fund Award 2009 Rensburg UK Mid-Cap Growth Inc

Best UK Small-Cap Equity Fund Award 2009 IP UK Smaller Companies Eq Inc

Best Asia Pacific Equity Fund Award 2009 First State Asia Pacific Leaders A Acc

Best Emerging Markets Equity Fund Award 2009 First State Global Emerging Markets Leaders A Acc

Best Europe ex-UK Large-Cap Equity Fund Award 2009 Cazenove European A Acc

Best Europe Large-Cap Equity Fund Award 2009 Cazenove Pan Europe A GBP Inc

Best Global Large-Cap Equity Fund Award 2009 MFS Meridian Glob Equity A1 USD Acc

Best Sterling Corporate Bond Fund Award 2009 Standard Life AAA Income R Acc

Best US Large-Cap Equity Fund Award 2009 Jupiter North American Income Inc

Morningstar UK Fund House Awards 2009
The principle for our fund house awards is largely the same as that of our Fund Category awards--to identify those groups that have delivered strong long-term risk adjusted performance. In this case, however, we used each house's average five-year Morningstar Rating as our primary measure. It incorporates the same risk-adjustment calculation used in the Category Awards, but it places less emphasis on the one-year period than we used for the latter. We did this because we have found that the traits that make fund houses successful are largely structural in nature and should be manifest over the long haul if they really are in place. Things like incentive structures and recruitment procedures, attitudes towards costs, and an emphasis on original research may not lead a house to the top of the charts in any given year, but they should pay off over time. Please click here to learn more about the selection process for the Fund House Awards.

The winners of our Morningstar UK Fund House Awards 2009 are as follows:

Winners of the Morningstar UK Fund House Awards 2009
Award Firm Name
Best Larger Equity House Award 2009 Threadneedle Asset Management Ltd
Best Larger Fixed-Interest House Award 2009 Schroder Investment Management Ltd
Best Multi-Asset House Award 2009 M&G Investment Management
Best Specialist Equity House Award 2009 First State Investments
Best Specialist Fixed-Interest House Award 2009 M&G Investment Management

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Jackie Beard, FCSI

Jackie Beard, FCSI  is Director of Manager Research Services, Morningstar EMEA

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