Star Managers revisited: still leading the pack?
by Harry Brooks on Jan 15, 2013 at 07:01
We take another look at last year's Star Managers, and see whether they're still beating their benchmarks.
How have our Star Managers fared?
Each issue of Citywire Global magazine features a Star Manager whose exceptional long-term performance sets them apart from the crowd.
In this gallery we revisit the Star Managers who featured in the magazine in the first six months of the year, and see how their funds have performed since then.
Graphs show fund returns since the manager featured in the magazine
Sector: Equity North America
The quartet of managers behind the Brown Advisory American fund featured in the first Star Manager column of 2012, having beaten their S&P 500 benchmark for almost three years on the trot.
The managers (pictured top to bottom: Bernstein, Hathaway and Stuzin) share a dislike of macro themes and ‘swinging’ investor sentiment, holding their stocks for an average of around three years. By comparison the average manager in the sector is holding an S&P 500 stock for just three months.
‘The time period that we hold on to stocks really sets us apart from other US equity funds,’ Stuzin said. ‘We don’t want to be momentum investors. We don’t want to play a sucker’s game.’
Since the quartet featured in the magazine the fund has largely tracked the benchmark's solid return of around 12%, delivering a gain of almost 11%.
Energy and technology are the funds’ favourite bets to break through when market turmoil begins to settle. 'We want to own good businesses. At a time when people are so reluctant about seeing opportunity in the future, technology trades at a good discount,' Bernstein said.
Kokkie Kooyman, Sanlam
Sector: Equity Sector Banks & Financial
Fund: Sanlam Global Financial
March saw Kokkie Kooyman take centre stage, showcasing the standout performance of his Sanlam Global Financial fund, which ranks first over three years out of the 59 funds we track in the sector.
In the three years to the end of January 2012 the $268 million Global Financial fund returned 155.85%, far outstripping the benchmark's 50.01% gain.
Kooyman's big theme back in March was catastrophe reinsurance firms, valuations of which hit a 20-year low at the start of 2011 amid intense competition. ‘At the start of the year the insurers were sold down and so we increased our holdings aggressively,' he said. 'We are getting quite a good return on capital and we think 2012 will be a very good year.'
Since we caught up with Kooyman his fund has kept closely to its benchmark, returning just over 14% compared with the almost 16% return of the MSCI World/Financials index.
Kim Ward, Dalton Strategic Partnership
Sector: Equity Sector Natural Resource
Top resources manager Kim Ward was April's Star Manager, boasting a massive 166% return from his Melchior Selected Trust Resources in the three years to the end of February 2012. Over the same period the benchmark returned 84%.
Although the fund is global in reach, about 40% is invested in Ward's native Canada, where his knowledge of small- and mid-cap resources companies has driven outperformance. ‘I think we have an edge in these below-the-radar type equities,’ he acknowledged.
Ward was among the first to grasp the potential of Canadian tight rock oil plays Arcan Resources and Strategic Oil & Gas, piling in at knock-down prices before the story broke.
However, Ward's had a tougher time of things recently, with the fund dipping away from its benchmark in May. It's not made up the ground yet, and since April is down 12.2% compared with a 3% rise in the benchmark.
Andy Headley, Veritas Asset Management
Sector: Equity Global
Fund: Veritas Global Focus
Euro Stars AA-rated Andy Headley put in an appearance in May, based on his fund's 24.47% return over the previous five years compared with a 0.66% drop from its MSCI World TR benchmark.
Headley attributed this standout performance to the fund's relentless scrutiny when considering new stocks. ‘Seven of us are trying to uncover any flaws in the argument of whoever is presenting the ideas. The aim is that hopefully between seven of us we can pick up any problems within the analysis early on,' he said.
Since Headley's appearance in the magazine his fund has suffered compared with its benchmark, ending up about 2% ahead of where it started after a spell in the red in May.
Headley's fund has a marked bias towards mega-cap stocks, with Roche, Vodafone and Capita the three biggest holdings. He has no time for Apple, however, arguing the tech giant has an identity crisis: 'Apple is a high quality company but we don’t analyse it because we can’t work out whether it’s a product business or a recurring revenue service business.'
David Leduc, BNY Mellon Asset Management
Sector: Bond EUR
Fund: BNY Mellon Euroland Bond
David Leduc's shunning of credit ratings agencies, preferring to assess a country’s or company’s credibility himself, certainly seems to be panning out, with his fund's five-year return of over 35% comfortably ahead of his benchmark.
Leduc says the rating criteria he implements has helped the investment group stay ahead of the pack. As early as the tail-end of 2009, Leduc says he didn’t own any Portuguese or Irish bonds and only had limited exposure to Spain.
In the months since his appearance in the magazine Leduc's winning streak has continued, with his fund returning 7.8% since June compared with the benchmark's 5.24%. In September Leduc was awarded our elite AAA Euro Stars rating based on his consistent performance.
More about this:
Look up the funds
- Brown Advisory American B USD
- Sanlam Global Financial A USD
- Melchior Selected Trust Resources B4 CAD
- Veritas Global Focus USD A
- BNY Mellon Euroland Bond C EUR
Look up the fund managers
- Richard M. Bernstein
- Kenneth M. Stuzin
- Christopher A. Berrier
- Timothy W. Hathaway
- Kokkie Kooyman
- Kim Ward
- Andy Headley
- David Leduc