Lone stars: consistency kings across asset classes

Paul DeNoon, AllianceBernstein

Asset class: Bond Emrg Mkts Global HC (USD)

Fund: AllianceBernstein-Emerging Mkts Debt Pf S12 USD

Number of managers in asset class with five-year track record: 41

First up is AllianceBernstein’s Paul DeNoon, who has achieved a notable stand out performance for his work on the hard currency EMD fund, the $844 million AllianceBernstein-Emerging Markets Debt Portfolio.

His best period of outperformance came in 2009/10, when DeNoon returned 6.6 percentage points more than the average manager in his sector. This compares to relatively tight margins in other periods, such as between November 2007 to November 2008, when he outperformed by 2 points.

At present, DeNoon’s largest holdings are in Russian energy giant Gazprom, government debt of the Ivory Coast and also Colombian sovereign debt. His largest geographic exposure is to the Mexican market, which makes up 12.7% of the fund's allocation by country.

Note: Graphs are not in any particular order relative performance.

Hugh Young, Aberdeen

Asset class: Equity Asia Pacific (USD)

Funds: Aberdeen Asia Pacific & Japan A Acc, St James's Place Far East Acc

Number of managers in asset class with five-year track record: 41

Emerging market veteran Hugh Young is the only manager to have consistently beaten the average manager in the Equity Asia Pacific sector over the past five years. The Singapore-based manager has done this while helming two separate strategies.

The Euro Stars AA-rated manager has had two notable periods of outperformance. Between 2009 and 2010, Young returned 12 percentage points more than the average manager, while in the 2011-2012 analysis period he beat the average manager’s return by 8.3 percentage points.

Young’s largest allocations at present in the Aberdeen Asia Pacific & Japan market are to Japanese equities (21%), Hong Kong equities (19.9%) and Singapore equities (14%). This is largely through exposure to financial stocks, which make up 29% of his portfolio allocation by sector.

Martin Lau, First State

Asset class: Equity China (USD)

Fund: First State China Growth II

Number of managers in asset class with five-year track record: 20

This is the first of two appearances for First State’s emerging Asia specialist Martin Lau. In the Equity China sector, Lau is the only one of 20 managers with a five-year track record to have outperformed in each of the past five years.

Lau, who has run the $4.4 billion fund since April 2002, has opted for a strong underweight to financials names (20.5 percentage points below his benchmark), while holding strong overweights in utilities, consumer staples, consumer discretionary and IT names.

Over the past five years, Lau has posted impressive returns and even broke the 100% mark in 2008/09 with a return of 106.12%. This was while his average peer returned 83.88%.

Teera Chanpongsang, Fidelity

Asset class: Equity Emerging Mkts Asia (USD)

Fund: OP-Kehittyva Aasia A

Number of managers in asset class with five-year track record: 8

Fidelity’s Teera Chanpongsang is the sole consistently, outperforming manager in the Equity Emerging Markets Asia sector for his work on the mandate, OP-Kehittyva Aasia.

Chanpongsang’s best period of outperformance came in 2009/10 when he returned 33.15% compared to an average manager return of 15.26%. This equates to an outperformance of 17.89 percentage points by the Thailand-born fund manager.

The Euro Stars A-rated manager Chanpongsang currently runs four funds across three sectors – including Equity India and Equity Asia Pacific Ex Japan.

Kenneth Nicholson, Standard Life

Asset class: Equity Europe Sm&Mid Cap (Euro)

Fund: Standard Life SICAV European Smaller Cos D

Number of managers in asset class with five-year track record: 79

Euro Stars A-rated manager Kenneth Nicholson has run the Standard Life SICAV European Smaller Companies fund since 2007 and is the fifth best performing European small and mid-cap equity manager on a pure total return basis over the past five years.

In terms of consistent performance, Nicholson is another manager to have performed strongly in 2008/09 when he returned 15.38 percentage points more than the average manager in his sector.

At present, Nicholson’s €70 million fund has a strong bias towards the UK market, which makes up 37% of his geographic exposure. On a sector-by-sector basis, his three largest allocations are to industrials (32%), IT (14.6%) and consumer discretionary stocks (13.1%).

Louisa Lo, Schroders

Asset class: Equity Greater China (USD)

Funds: Danske Invest Greater China A, Danske Invest Kina, Schroder ISF Greater China I Acc, Schroder Selection NMS-Greater China Equity A USD

Number of managers in asset class with five-year track record: 15

Another fund manager to appear twice in this analysis is Schroders’ Louisa Lo, who is recognised here for her strong performance across four funds in the Equity Greater China sector over the past five years.

Looking at her performance, Lo has stayed relatively close to the average manager and her outperformance in each of the five analysis periods came from quite tight margins.

The greatest outperformance came in 2008/09 when she returned 81.04% compared to the average manager return of 77.43%. This compares to the narrowest margin, which was 0.33% in 2009/10.

Martin Lau, First State

Asset class: Equity Hong Kong (HKD)

Fund: First State Hong Kong Growth III

Number of managers in asset class with five-year track record: 5

A second appearance for Lau, who is recognised in the Equity Hong Kong sector for his work on the $261 million First State Hong Kong Growth III fund. Lau has run the fund since April 2002.

The main areas of investment for the fund are financials (41%), utilities (14.8%) and consumer discretionary stocks (12.8%).

His largest single positions are multinational conglomerate Cheung Kong Holdings and The Link REIT (Real Estate Investment Trust).

Settimio Stigliano, Arca

Asset class: Equity Italy (Euro)

Fund: Arca Azioni Italia

Number of managers in asset class with five-year track record: 14

Operating in one of the more volatile markets of recent years is Arca’s Settimio Stigliano, who has managed consistent outperformance despite the onset of the eurozone crisis and the difficulties it posed both for equities and the Italian market.

Exemplifying the difficulties, Stigliano’s best period of outperformance came in 2010/11 when he managed to lose less than the average manager. During this 12 month period, Stigliano lost 13.19% while the average manager lost 16.66%.

Stigliano has run the fund since it was launched in April 1992 and is a Citywire AA-rated manager.

Odd Hellem, Fondsfinans

Asset class: Equity Norway (Norwegian Krone)

Fund: Fondsfinans Spar

Number of managers in asset class with five-year track record: 24

The sole stand out performer in the Equity Norway sector is Fondsfinans’ Odd Hellem, who invests primarily in stocks listed on the Oslo Stock Exchange. He has run the fund since April 2003.

In the Norwegian equity fund, Hellem operates a mid-cap, value-based investment approach and is mainly invested in the financial (24%), emerging (21%) and industrial (16.5%) sectors. His largest single position is in Norwegian banking group DNB, which makes up 9% of the fund.

Hellem was previously pinpointed in Citywire’s Buyers’ Market feature as being a popular local market choice for selectors due to his consistent outperformance.

John Yakas, Polar Capital

Asset class: Equity Sector Banks & Financials (Euro)

Funds: Polar Capital Asian Financials, Polar Capital Financial Opportunities I EUR Inc

Number of managers in asset class with five-year track record: 14

Financials specialist and market commentator John Yakas emerges as the sole, financials-focused manager to have outperformed in each of the past five years.

This performance combines investment both in the global financials market and also in the Asian financials markets.

The Polar Capital manager, who runs two financials-specific strategies, posted his strongest return in 2008/09 when he returned 45.58%. This was while the average manager returned 20.84%.

According to the most recent available factsheet for Polar Capital Financial Opportunities, Yakas’ main area of investment is in diversified banks (38.5%). This is while regional banks (11%) and property and casualty insurance (10%) make up the second and third largest sector exposures.

Fritz Eggimann, AMG

Asset class: Equity Sector Gold & Precious Metals (Euro)

Fund: AMG Gold Minen & Metalle A

Number of managers in asset class with five-year track record: 19

Citywire AAA-rated manager Fritz Eggimann is the second best performing gold and precious metals manager in absolute terms over the past five years. However, he is the only manager in his sector have consistently outperformed the average manager.

In a similar vein to Louisa Lo, Eggimann is another fund manager who has only narrowly outperformed in most of the years covered in this analysis period. However, his largest outperformance was 22% in 2009/10.

Eggimann, who has run the MG Gold Minen & Metalle fund since April 2006, favours senior companies (28%), with silver stocks (17%) and exploration names (15%) being among his major sector exposures.

Stuart O’Gorman, Henderson

Asset class: Equity Sector Information Tech (Euro)

Funds: Eastspring Investments-Global Technology CS, Henderson Global Growth Acc, Henderson Global Technology A Net Acc,Henderson HF Global Technology A2 EUR

Number of managers in asset class with five-year track record: 37

Tech specialist Stuart O’Gorman sits as the only man in his field to have consistently beaten the average over the five years to the end of November 2012. This is while running three funds on behalf of his firm Henderson and also a tech mandate for Eastspring Investments.

O’Gorman is a Euro Stars A-rated manager and was most recently showcased in the Citywire Star Tracker series. This was an analysis of how his performance has fared since being named as one of the most consistent tech managers back in November 2009.

Edward P Owens, Wellington Management

Asset class: Equity Sector Pharma & Health (Euro)

Fund: Storebrand WGA Health Care

Number of managers in asset class with five-year track record: 23

Entering his 12th year as lead manager on the Norway-domiciled Storebrand WGA Health Care fund is Edward P Owens. Owens is employed by Wellington Management and runs the fund on mandate for Storebrand.

The NOK 69 million (€9 million) has a global focus and Owens defines it as a relatively risky strategy. In the fund documentation, Owens indicates that the emphasis of investment is on value-driven stocks.

His best period of outperformance came in the period November 2009-November 2010. Over this period, Owens returned 21.10% while the average manager returned 16.52%.

Louisa Lo, Schroders

Asset class: Equity Taiwan (Taiwan Dollar)

Funds: Manulife Global Fund-Taiwan Equity AA, Schroder ISF Taiwanese Equity A Acc

Number of managers in asset class with five-year track record: 3

Rounding off our analysis of the fund managers to have produced the most consistent performers in their sector is Schroders Louisa Lo. Lo, who was previously recognised for her performance in the Equity Greater China sector, is here championed for her work in the Equity Taiwan sector.

In this sector, Lo, who runs two Taiwanese equity funds, had her greatest period of outperformance between November 2011 and November. During this period, Lo returned 22.86% while the average manager returned 12.54%.