Introducing the Morningstar Awards 2013

Christine St Anne  |  07/02/2013Text size  Decrease  Increase  |  
Christine St Anne: It's certainly awards season with the Oscars coming up. But Morningstar also has its awards for the investment management industry. Today, I'm joined by Tim Murphy to give us a little insight into the Morningstar Awards 2013.Tim, welcome.

Tim Murphy: Thanks, Christine.

St Anne: Tim, what sort of award categories do we have?

Murphy: So there's a range of awards. The bulk of the awards are in individual asset classes. So, large-cap Australian equities, fixed interest, listed property, multi-sector. So, we look at range of factors within each of those asset classes. But then we have two awards that are slightly different to that.
The first of which is the Emerging Manager of the Year award, where we look at capabilities or funds that are new; less than three years old that we think have a strong chance of becoming future good performers and future winners of individual asset class categories. And if you look through the finalists for our awards, you see there're actually a number of former winners and finalists of the Emerging Manager of the Year award; so we think it's quite a good sign of up and comers to keep an eye on.

And then finally, we have our overall Fund Manager of the Year, who is the manager that has demonstrated the best performance across a number of capabilities rather than just any one particular asset class; so the best sort of overall all-rounder, if you like.

St Anne: Can you give us further insights into the processes behind the nominations?

Murphy: Sure. So, while that's an annual award, we look at more than just annual performance for the last 12 months. Clearly, the fund manager needs to have done well in the last year, but equally too, we like longevity for these things. So, there's three key criteria we look at is obviously performance last year.

Secondly, performance over the longer term as well; so not only has the manager done well last year, but have they done well consistently for clients over a long period of time. And thirdly, we factor in the Morningstar research team's analyst writing into the picture as well. So, we want to be focusing on managers who have done well in the past, but who also we think have a good chance of continuing to perform well into the future. So, a combination of those three factors within each of the asset class and overall categories determines the winner there.

The one exception to that is the Emerging Manager of the Year Award. Obviously, given that it is a bunch of managers that are newer to market there tends to be a more qualitative discussion amongst the Morningstar fund research team based on the managers that we've seen that are fairly new or throw around some ideas and then vote on those accordingly to determine first of all the finalists and then the ultimate winner.

St. Anne: Tim, did you pick up any trends when making the nomination list?

Murphy: So, it really depend on the asset classes. So, I think, there's a few managers nominated the sheet that we haven't seen for quite a few years. There is a couple of new ones and additionally there is a couple that have been consistently up there in the last couple of years as well. So, it's hard to define a trend across the board because it really does vary depending on the particular award or asset class and what's going on at that level. So, a combination of the old, the new and the consistent through time, a combination of boutiques and institutional names, so a good spread way to think across the various categories.

St. Anne: It's been a few challenging years for the managed funds industry. Tim, why do you think investors should keep their faith in professional managers?

Murphy: Well, I think professional managers can add a lot of value and certainly the (funnel through) awards are good examples of that in all cases. People haven't been putting money into the market in recent years because there has been a bit of fear out there. Term deposit, cash rates have been quite high. So, it's been easy to stay in the safe option and getting 5 per cent, 6 per cent in terms deposits. But going forward, interest rates have come down quite materially.

Investors are starting to realise that, hey, market after last year, equity markets up around 20 per cent, listed property is up 30 per cent, interest rates – cash rates now sort of down around the 3 per cent mark, getting more into markets and then having someone professionally manage that in a managed fund context can certainly add a lot of value.

St. Anne: Tim, thanks much for your time today.

Murphy: Thanks Christine.

Video Archive...

Which funds are worth paying for?
23/03/2017  High active share funds--that is, those managers who take off-benchmark bets--outperform those which are low active share. So, ban closet trackers from your portfolio.
Bond market wobbles no cause for panic
21/03/2017  Australian bonds see only a slight tremor in response to the Fed's rate rise, says John Likos, Morningstar's senior credit analyst, who also provides insights on the new, and anticipated, hybrids from Australian banks.
ESG: Essential steps for successful long-term investing
21/03/2017  Want sustainable long-term returns? Morningstar UK reveals the essential components and the fund providers who are getting it right.
Few values left in global stock market
20/03/2017  Morningstar's directors of equity research think investors need to be cautious in the market today and offer some of their best investment ideas.
Why the time is right to invest in emerging markets
20/03/2017  Hilde Jenssen from Norwegian fund manager Skagen admits that emerging markets have disappointed investors over the past three years--but says valuations are attractive and reforms are boosting returns.
Johnson: Fed's path may not be smooth
16/03/2017  The Fed's plan for stair-step rate hikes in the coming years will likely be derailed by economic reality, says Morningstar's Bob Johnson.
First-half 2017 earnings season insights
15/03/2017  Companies produced reasonably good results overall with only a few standouts, even as a cost-out theme dominated, says Peter Warnes, head of equities research, Morningstar.
The growing appeal of LICs
06/03/2017  The popularity of listed investment companies is on the rise once again, but there are several things investors need to be aware of before buying in, explains Michael Malseed, Morningstar senior analyst, manager research.
Earnings season wrap: BHP exercises good cost control
27/02/2017  As the curtains close on the 1H17 reporting season, BHP books earnings that are slightly softer than expected, while Woolies takes market share at the expense of margins.
Possible $2.5bn tailwind to drive hybrid demand in 2017
22/02/2017  Strong supply dynamics and ongoing economic stability should create significant opportunities for hybrid investors in 2017, according to John Likos, senior credit analyst, Morningstar Australia.
Earnings season wrap: Telstra feels competitive heat
17/02/2017  As the 1H17 earnings season rolls on, Wesfarmers posts a bumper profit, Newcrest restores its interim dividend, while Telstra's profit falls as it feels the heat of intense competition.
Earnings season wrap: Rio Tinto's dividend surprises
10/02/2017  Rio Tinto delivers a surprise full-year payout of US$1.70, NAB records a soft first quarter, and CIMIC posts an annual net profit in line with Morningstar's expectations.
Leveraging the opportunity of international students
07/02/2017  Co-founder and CEO of Navitas, Rod Jones, explains the firm's business model, which is built largely around international students and university partnerships.
Xero CFO gives outlook for 2017 and beyond
02/02/2017  Sankar Narayan, chief operating and financial officer of accounting software firm Xero gives his insights on the company's business model and outlook, with Morningstar analyst Gareth James adding his views
Asia growth engine not threatened by Trump, says Barings
30/01/2017  Long-term investors in China and wider Asian equities should not worry about President Trump, says Barings head of Asian equities Hjung Jin Lee.
Shifting fortunes for ANZ, more of the same for CBA in 2017
12/01/2017  Australian banks are well-positioned as they head into 2017, with ANZ moving from least profitable in 2016 to become one of the sector's top performers and CBA remaining an investor favourite.
Is Trump a threat to emerging markets?
12/01/2017  Is President Donald Trump a threat to emerging market returns? Paul Jackson from the UK-based Source ETF considers the outlook for sector and where investors can find the best opportunities.
Platinum, Aussie banks and Peter Warnes among top interviews of 2016
22/12/2016  We look back on some of our most notable interviews of the year, as Morningstar analysts and external experts helped us delve into some of the biggest events that shaped Australian and global markets in 2016.
Oil price finds sweet spot, while mining hits rock bottom
20/12/2016  The rise in oil prices should see improved performances from Australian producers in 2017, while mining services companies will continue to struggle amid weaker Chinese demand, says Morningstar equity analyst Mark Taylor.
How Greek mythology can make you a better investor
07/12/2016  Don't be over confident or follow the herd, and like Odysseus, learn to have yourself "tied to the mast" when it comes to long-term investing.