|
Resources
|
 Getting Started
|
The Wise Investor
|
Online Investing
|
Glossary
|
Book Centre
|
|
globefund.com Alert
|
|
Table of Contents
|
Put your financial adviser on a leash
February 11, 2000 |
100% Foreign content for your RSP
December 22, 1999 |
Tax Loss Selling or Dealing With Your Mistakes
November 26, 1999 |
Life Stages of your RRSPs
November 12, 1999 |
Just give me boring (but great) rates of return
November 3, 1999 |
De-mystifying Demutualization - part Two
October 25, 1999 |
De-mystifying Demutualization - part One
October 19, 1999 |
Seg funds for the simple minded
September 14, 1999 |
The interest rate game Part 2
August 12, 1999 |
The interest rate game Part 1
July 30, 1999 |
Choosing funds: Five for the long run
July 14, 1999 |
New Funds: To buy or not to buy
July 2, 1999 |
Making sense of momentum investing
June 18, 1999 |
|
Resource recovery hinges on supply and demand
April 30, 1999 |
Tech funds draw strength from favourable trends
March 24, 1999 |
|
The economic implications of the euro - An interview with Ranga Chand
February 12, 1999 |
Underperforming small-cap funds have strong upside potential
January 29, 1999 |
How to pick a winning equity fund portfolio
January 15, 1999 |
|
|
|
Rating the fund managers
RANGA CHAND
From Chand’s World of Mutual Funds, 1999 Edition
Friday, June 4, 1999
As investors, we all want to know who the top-performing fund managers
are. Many companies prefer the anonymity of a team approach, while
others highlight their "star" fund managers. The key to assessing
a manager's ability is to see how the manager has done relative to his
or her peer group in terms of both performance and risk -- looking only
at a fund's returns ignores risk, the other important half of any investment
equation. A fund that consistently beats the competition may also be one
that is taking on more risk.
To help investors gauge a fund manager's overall performance, and in
response to repeated requests from readers, we have developed a quantitative
measure called the skill ratio. This skill ratio takes into account
both the fund's risk and its relative returns, and is derived, accordingly, from the fund's performance index and its risk index.
-
Performance Index -- This is a relative measure of a fund's performance,
namely the ratio of a fund's five-year return to the average for its category.
A performance index of 1.00 is average. A ratio higher than 1.00
indicates that a fund delivered above average returns, whereas a ratio lower than 1.00 indicates below-average performance.
-
Risk Index -- This is the ratio of a fund's five-year standard deviation
to the average standard deviation of all funds in its category. As
in the case of the performance index, a risk index of 1.00 is average.
A ratio higher than 1.00 indicates above-average risk, whereas a ratio
below 1.00 indicates below-average risk.
-
Skill Ratio -- This composite measure combines a fund's relative
performance and risk to provide the investor with a measure of a fund manager's
overall performance. A skill ratio above 1.00 indicates superior
overall performance.
The Selection Process
Who are the leading Canadian equity, international equity, and Canadian
bond fund managers? At the outset, we screened out co-managed funds, unless
a lead manager was indicated, as well as those managed by a team.
Our first criterion in determining the top 10 fund managers in each
category was tenure -- a portfolio manager must have been at the helm of
his or her fund for a minimum of five years. (The cut-off date was May
31, 1998.)
The second criterion was that fund managers deliver above-average returns
in their respective categories. Skill ratios were calculated for all managers
and, based on the above indices, those that scored in the top 10 in each
of the three investment categories made the list. The tables below
show the performance, risk, and skill ratios of each of these Heavy Hitter
fund managers and, in the case of Canadian and international equities,
also gives their investment styles.
Highlights
Interestingly, all the top 10 Canadian equity fund managers follow a bottom-up
management style where the emphasis is on selecting promising individual
companies. Amongst this group, six are value investors, two are growth
investors, and the other two follow a blended approach in selecting securities
for their portfolios.
By contrast, three of the top 10 international equity fund managers
follow a top-down management style where the emphasis is on the big picture
rather than individual companies. Four of the managers are growth investors,
three are value investors, and three follow a blended approach. Two
Templeton fund managers -- Mark Holowesko for the Growth Fund and Don Reed
for the International Stock Fund -- made this list of top performing portfolio
managers.
Among the Canadian bond fund managers, five took on more risk relative
to their peer group but all compensated for this by delivering superior
returns. Gary Feltham, manager of two of Calgary-based Mawer's funds --
the Canadian Income Fund and Canadian Bond Fund -- is on the list of top
10 bond fund managers.
Ranga Chand is a leading independent economist and mutual fund analyst and is President of the research firm Chand Carmichael & Company Limited. He is also the author of the national bestseller Chand's World of Mutual Funds 1999 Edition and Ranga Chand's Getting Started with Mutual Funds, both available through the GLOBEfund Bookstore.
You can now visit Ranga Chand's new web site located at www.worldoffunds.com.
|
Top 10 Canadian Equity Fund Managers
|
| |
Manager |
Fund |
Performance
Index |
Risk
Index |
Skill
Ratio |
Investment
Style |
| 1 |
Tim McElvaine1 |
Cundill Security "A" |
1.36 |
0.61 |
2.24 |
Bottom-Up/Value |
| 2 |
George L. Frazer |
Associate Investors |
1.45 |
0.78 |
1.86 |
Bottom-Up/Blend |
| 3 |
Francis Chou |
Chou RRSP |
1.45 |
0.89 |
1.62 |
Bottom-Up/Value |
| 4 |
Fred Pynn |
Bissett Canadian Equity |
1.54 |
0.97 |
1.58 |
Bottom-Up/Growth |
| 5 |
Irwin A. Michael |
ABC Fundamental Value |
1.73 |
1.16 |
1.50 |
Bottom-Up/Value |
| 6 |
Ian Ihnatowycz |
Clean Environment Equity |
1.54 |
1.05 |
1.47 |
Bottom-Up/Value |
| 7 |
Guy LeBlanc |
Cote 100 Amerieque REER |
1.46 |
1.11 |
1.32 |
Bottom-Up/Growth |
| 8 |
John Smolinski |
Royal & SunAlliance Equity |
1.19 |
0.91 |
1.31 |
Bottom-Up/Value |
| 9 |
Richard Howson |
Saxon Stock |
1.22 |
0.95 |
1.28 |
Bottom-Up/Value |
| 10 |
Catherine (Kiki) Delaney2 |
Spectrum United
Canadian Equity |
1.15 |
0.93 |
1.24 |
Bottom-Up/Blend |
1
Tim McElvaine is no longer the manager of the Cundill Security fund.
2
Kiki Delaney is no longer the manager of Spectrum United Canadian Equity Fund. She recently moved to Trimark.
|
|
Top 10 International Equity Fund Managers
|
| |
Manager |
Fund |
Performance
Index |
Risk
Index |
Skill
Ratio |
Investment
Style |
| 1 |
Bill Kanko3 |
Ivy Foreign Equity |
1.31 |
0.57 |
2.31 |
Bottom-Up/Blend |
| 2 |
Mark Holowesko |
Templeton Growth Fund |
1.25 |
0.79 |
1.59 |
Bottom-Up/Value |
| 3 |
Robert Tattersall |
Saxon World Growth |
1.31 |
0.85 |
1.54 |
Bottom-Up/Value |
| 4 |
Donald F. Reed |
Templeton International Stock |
1.47 |
0.96 |
1.53 |
Bottom-Up/Value |
| 5 |
Dick Haberman |
Fidelity International Portfolio |
1.34 |
0.89 |
1.51 |
Bottom-Up/Growth |
| 6 |
James H. Shakin |
Cornerstone Global4 |
1.16 |
0.83 |
1.40 |
Top-Down Growth |
| 7 |
Guy Normandin |
Talvest Global RRSP |
1.07 |
0.88 |
1.22 |
Top-Down/Growth |
| 8 |
Gerald A. Cooper-Key |
Mawer World Investment |
1.21 |
1.00 |
1.21 |
Bottom-Up/Blend |
| 9 |
Bill Sterling |
C.I. Global |
1.12 |
0.95 |
1.19 |
Top-Down/Blend |
| 10 |
John Boich |
Canada Trust International Equity |
1.01 |
0.95 |
1.06 |
Bottom-Up/Growth |
3
Bill Kanko is no longer the manager of Ivy Foreign Equity fund. He has also moved to Trimark.
4
The Cornerstone Global fund is now known as IRIS Global Equity. James Shakin is still the manager.
|
|
Top 10 Canadian Bond Fund Managers
|
| |
Manager |
Fund |
Performance
Index |
Risk
Index |
Skill
Ratio |
| 1 |
Clive Coombs |
AGF High Income |
1.02 |
0.66 |
1.55 |
| 2 |
John Zechner |
C.I. Canadian Bond |
1.17 |
0.85 |
1.38 |
| 3 |
Robert Ciamarro5 |
Ferique Bond |
1.12 |
0.88 |
1.28 |
| 4 |
Gary J. Feltham |
Mawer Canadian Income |
1.11 |
0.90 |
1.23 |
| 5 |
Carmand Normand |
Batirente-Section Obligations |
1.28 |
1.06 |
1.20 |
| 6 |
Michael Quinn |
Bissett Bond |
1.19 |
1.02 |
1.17 |
| 7 |
John W. Braive |
MD Bond |
1.14 |
1.03 |
1.12 |
| 8 |
Gary J. Feltham |
Mawer Canadian Bond |
1.07 |
0.98 |
1.09 |
| 9 |
Greg Latremoille |
Beutel Goodman Private Bond |
1.10 |
1.07 |
1.03 |
| 10 |
Jeff Waldman |
NN Bond |
1.16 |
0.15 |
1.01 |
|
5Robert Ciamarro is no longer the manager of Ferique Bond.
|
Return to top of page
|
This column has been excerpted with permission from Chand's World of Mutual Funds, 1999 Edition, published by Stoddart Publishing. Copyright 1998 by Ranga Chand.
© Copyright 2008 CTVglobemedia Publishing Inc. All Rights Reserved.