Morningstar's shortlist for Manager of the Year revealed
Nominees showed an ability to deliver quality, high-performing investments in a particularly volatile market.
First Sentier Investors, Franklin Templeton and Hyperion Asset Management are all in the running to take out Morningstar Australia's fund manager of the year award.
Finalists for the 2021 award, announced by Morningstar Australasia director, manager research ratings Aman Ramrakha on Tuesday, were all recognised for their oversight of funds which delivered outstanding outcomes to investors through the pandemic.
Now in its 21st year, the Awards program celebrates the best of the Australian fund management profession as selected by Morningstar’s Manager Research analysts.
“The unprecedented market volatility over the ongoing fallout of the pandemic brought uncertainty and challenges to even the most sophisticated of investors in 2020,” Ramrakha says.
“Despite the turbulent past year, our nominated fund managers demonstrated an ability to deliver quality, high-performing investments and have stood above peers with exceptional returns over the longer term.”
Brisbane-based boutique Hyperion Asset Management emerged as a big success story in 2020, topping all three Morningstar categories they offer funds in - Large Cap Australian Growth, Small/Mid Cap Australian Growth and Large Cap Global Growth. The firm's persistence with high-quality companies with enduring competitive advantages saw them deliver returns of 30 per cent plus across the board. Hyperion will this year seek to launch an actively listed version of its global fund due on the ASX next month, opening the strategy to a wider range of investors.
Hyperion Asset Management | Firm flows
Source: Morningstar Direct
First Sentier's suite of funds also caught the attention of Morningstar analysts. Senior analyst Christopher Franz recognised the firm's gold-rated global equity growth fund - Stewart Investors W Worldwide Sustainability - for its management team and research approach, which delivered returns 7.85 per cent above the MSCI World Ex Australia NR index in 2020.
"This strategy has become a top pick in global equities for investors who share an equally long-term mindset," Franz says.
Since rebranding from Colonial First State Global Asset Management (CFSGAM), the $228 billion firm has brought 17 strategies to investors across multiple asset classes. CFSGAM was sold to Mitsubishi UFJ Trust and Banking Corporation, a wholly owned subsidiary of Mitsubishi UFJ Financial Group, by Commonwealth Bank of Australia in September 2019.
US fund giant Franklin Templeton has also undergone big changes. The firm acquired rival group Legg Mason earlier this year creating a fund management behemoth with over $1.5 trillion in assets. Legg Mason is known locally for its nine affiliate active investment managers, including active equity specialists Martin Currie, quality-driven fundamental equity shop ClearBridge, value investor Brandywine and global fixed income manager Western Asset. Top performing funds under Morningstar coverage include silver-rated Franklin Global Growth and Bronze-rated Legg Mason Western Asset Global Bond.
Finalists for Fund Manager of the Year categories
Award finalists and winners are determined by a combination of qualitative research by Morningstar's manager research analysts; risk-adjusted medium- to long-term performance track records; and performance in the 2020 calendar year. To receive the overall Fund Manager of the Year award, a fund manager must have offered products in multiple award categories or delivered an outstanding outcome for investors.
"Fund managers were assessed not only on whether they were a finalist in more than one category, but on products that had peer-beating returns but did not obtain a top three position," Ramrakha says.
"The winner must have strong returns across multiple categories, proven themselves a good steward of investors' capital, and in Morningstar's opinion, have achieved the highest level of funds management excellence."
Selection of funds from this years' Overall Fund Manager of the Year nominees
Source: Morningstar Direct
Finalists for the Undiscovered Manager award are global small/mid cap fund Artisan Global Discovery, specialist listed infrastructure fund Atlas Infrastructure Australian Feeder and environment-focused global equity fund BNP Paribas Environmental Equity. This award recognises includes managers or specific funds with strong investment merit that Morningstar considers worthy of bringing to the attention of the retail market. The manager may be newer to the retail market but has a successful track record offshore or in the institutional space.
The winners of the 2021 Morningstar Australia Awards will be announced at a ceremony on 26 February.