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

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.

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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.

About Author

Jackie Beard, FCSI

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

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