Being a finalist or actually winning the fund manager of the year award in specific asset classes is prestigious for the fund managers but what does it mean for you the investor? At Milestone, we focus on selecting quality fund managers who can perform above the majority of their peers - not just for one year but through an entire economic cycle. The good news is many of those managers have won either fund manager of the year or been a finalist in their asset class in 2014. Of even greater significance is these managers have achieved this with not just the Morningstar awards but also most recently in the FundSource awards.
Winning these prestigious awards is not a matter of paying to be on the short list. Reseach companies such as Morningstar and FundSource closely scrutinise every aspect of the investment company business. Performance for the past 12 months is a key factor, but much of the decision making on finalists is qualitative. The quality of the fund manager staff, their systems and processes, their fee structures, product literature and client service support are all taken into consideration. These managers are benchmarked against their peers and a quantitative and qualitative rating is applied to each.
Strong past performance and the winning of awards is no guarantee of future performance. However, when a manager wins similar awards from two different research companies and has strong performance over a number of years, then a greater degree of confidence is applied to how they might perform in the future.
Milestone spends a great deal of time researching fund managers and looking for who has the ability to outperform on a risk adjusted basis. Our investment into this research means we can often identify a winning manager well before they become popular and place a larger share of our client’s money with those who we believe will outperform. We call these managers our ‘core investment managers and they comprise our model portfolios. We are pleased to announce that of the 13 fund managers in our growth model portfolio, all four of our NZ based managers won either top or finalist awards and 3 out of the 5 offshore managers won similar type awards in their home location.