The turbulent market conditions of the first half of 2022 are evident in the July rebalance by FE Fundinfo, which saw 260 funds change their rating by three or four crowns, compared with the January update, in which just 35 experience a similar fate.
There are currently 397 funds with a five-crown rating.
The shake-up occurred in a multitude of sectors and across fund groups, which FE Fundinfo said shows “even the most experienced fund managers have struggled to maintain consistency” of late.
Particular success was seen in the IA Specialist Bond and IA Flexible Investment sectors, with many funds jumping from one crown to five.
Among those making the leap are the €2.17bn Carmignac Portfolio Securite, the $2.9bn Fidelity China Focus and Schroder MM Diversity, which weighs in at £339m.
Three Gam funds also rocketed to the top rating in the latest rebalance; Gam Multibond – ABS (€7.6m), Gam Star Cat Bond (€2.6bn) and Gam Star MBS Total Return (€1bn).
The latest rebalance also saw funds from the IA Volatility Managed, IA Mixed Investment and IA Flexible Investment sectors gaining the five-crown rating for the first time.
In total, 19 previously unrated funds were awarded five crowns in the July rebalance.
Charles Younes, research manager at FE Investments, said: “At the last rebalance at the beginning of the year we saw just seven funds gaining a five-crown rating for the first time. With more new funds and diverse strategies gaining the highest rating this time around, we can see how volatile the markets have been as investors increasingly chase returns in order to navigate the twin challenges of inflation and interest rates.
“Across the 19 who have gained the accolade for the first time, we can see bond funds, growth funds and ethical funds included, as well as funds focused on smaller companies and global equities which shows once again the importance of having a diversified strategy.”
Top of the charts
With the addition of three funds to the five-crown club, Gam is now the asset manager with the third highest number of top ratings (8), sitting behind Fidelity (10) and Premier Miton (12).
Joint fourth, with seven five-crown-rated funds each, are BNY Mellon, Carmignac Gestion, Invesco, Janus Henderson and Royal London. Rounding out the top 10, with six top ratings apiece, are Liontrust and Ruffer.
Premier Miton’s pole position was secured after three of its funds, which were previously unrated, all secured five crowns; they were Diversified Balanced Growth, Diversified Cautious Growth and Diversified Dynamic Growth.
Two Carmignac funds also went in at the top of the charts, Emerging Markets and European Leaders.
When it comes to the proportion of funds with five-crown ratings, Ruffer has firmly staked its claim at the top of the table, with six of its seven strategies earning top honours – giving it an 85.7% success rate.
Premier Miton sits second, with 32.4% of its 37 rated funds achieving five crowns, followed by Carmignac and 31.8% of its 22 funds.
Younes added: “What we are seeing in this latest rebalance is that fund managers that have the freedom to adapt their strategies in challenging markets are continuing to thrive and capture the benefits of active management. Where groups potentially have a house view that is driving manager stock selection, fund managers have struggled to maintain consistent performance.”