Money: Eighth win in a row for manager

Armstrong Jones has again walked away with the title of Morningstar/Business Herald Fund Manager of the Year.

The winner of the top fund management award for 2000 was chosen by Morningstar, the research organisation, after it had analysed the competing managers' returns and the operating methods that they used to get them.

The runner-up in the competition was AMP. WestpacTrust took third place.

As well as the overall Fund Manager of the Year title, Morningstar/Business Herald awards were also given to the best managers in six different categories.

These were multisector; NZ fixed interest; NZ property; NZ/Australian equities; international fixed interest; and international equities (for the individual category winners, and Morningstar's comments, see below).

Besides taking the top title, which it has now won for eight years in a row, Armstrong Jones also came first in both the property fund manager and New Zealand/Australian equities manager categories. The firm was also placed second equal in the international equities category.

The awards cover unit trusts, group investment funds and superannuation trusts offered by fund managers that have their operations based in New Zealand.

Only those funds that were rated for a minimum of 10 months of the year by Morningstar were eligible for the awards. Index funds were excluded.

According to Morningstar, the win by Armstrong Jones meant that it was the manager that "maintained the highest level of funds management excellence during calendar 2000."

It said this covered performance from both a return and a risk perspective.

Morningstar said it also looked at each group's business and investment disciplines, as well as its approach to investment and the investment philosophies that it followed.

When choosing the award winners, Morningstar used a mixture a quantitative research, looking back at the returns produced by the various funds, and qualitative analysis, the more subjective, looking at the strength of the fund managers' business.

As well as taking into account the performance of each fund, the analysis considered the risks taken to achieve those returns and took into account data stretching back as much as five years.

Morningstar said it looked at the makeup of each fund manager's business, and the processes that it used when making investment decisions.

Morningstar said the two approaches to the evaluation were equally important, so qualitative and quantitative factors were given equal weight in deciding who the winners were in each of the six categories.

Each fund manager was awarded points in each of the six sectors and the manager with the highest total of points took the Fund Manager of the Year title.

Armstrong Jones manages about $4.7 billion. Managing director Paul Fyfe said the win came down to the quality of the company's staff.

"In our business you are only as good as your people and I think our people are terribly good and terribly committed.

"It's motherhood, but that's how to do it."

Multisector


Winner: BT Funds Management


Morningstar's comment: In a year when volatile markets made successful asset allocation a significant challenge, BT Funds Management delivered to investors in its diversified unit trusts and superannuation trusts among the highest returns, with higher minimum returns, and better value for the risk taken over time compared to other multisector fund managers. BT Funds Management achieved these positive results by the application of a tightly-controlled asset allocation process which benefits from access to research and macroeconomic analysis to provide a comprehensive 'top down' and 'bottom up' integrated assessment framework.

2nd: AMP

3rd: WestpacTrust


New Zealand & Australian Equities


Winner: Armstrong Jones


Morningstar's comments: The New Zealand and Australian equity markets were under the shadow of both local and global economic slowdowns in 2000. Armstrong Jones has a defined investment process and staff experience, and parent and subcontracted investment manager Mercantile Mutual (now ING) has structured and highly-disciplined processes. These have consistently produced among the highest returns, and highest minimum returns, with among the best value for risk taken over time compared to other fund managers for investors in Armstrong Jones' New Zealand and Australian equities funds.

2nd: BT Funds Management

3rd: AMP


New Zealand Fixed Interest


Winner: National Bank


Morningstar's comment: The New Zealand fixed interest market was pretty flat during 2000, with generally modest returns. The National Bank's subcontracted New Zealand fixed interest investment manager, AMP, has a strong focus on duration management, active assessment of credit risk, and the ability to draw on extensive global resources and experienced personnel. This enabled the National Bank to provide investors in its fixed interest unit trusts and superannuation trusts with the best returns, best value for risk taken, and lowest volatility over time than other New Zealand fixed interest fund managers.

2nd: BNZ

3rd: WestpacTrust


New Zealand Property


Winner: Armstrong Jones


Morningstar's comment: New Zealand property suffered from the same relatively gloomy conditions and outlook as other New Zealand asset classes during 2000. However, Armstrong Jones' 'buy well, add value, manage intensively and sell profitably' approach, applied by a very well-resourced, highly-qualified expert property team, has enabled Armstrong Jones to achieve consistently higher returns, lower volatility, higher minimum returns, and better value for risk taken for investors in its property trusts and superannuation trusts over time compared to other New Zealand property fund managers.

2nd: Tower

3rd: Guardian Trust


International Fixed Interest


Winner: Colonial First State


Morningstar's comments: During a generally subdued period for international fixed interest markets, Colonial First State's distinctive global fixed interest investment style - which is flexible enough to gain value from a variety of securities, and incorporates good risk controls - produced among the highest minimum returns and among the best value for risk taken over time compared to other international fixed interest fund managers for investors in Colonial First State's international fixed interest funds.

2nd: WestpacTrust

3rd: BNZ


International Equities


Winner: AMP


Morningstar's comments: Despite a volatile year in 2000, with international equities markets absorbing the after-effects of technology stock corrections and the onset of global economic slowdown, the 'top down' thematic approach of AMP's international equities manager - AMP Henderson Global Investors - enabled AMP to achieve among the highest returns, with higher minimum returns and better value for risk taken over time compared to other fund managers, for investors in AMP's international equities unit trusts and superannuation trusts.

2nd equal: Armstrong Jones / WestpacTrust

4th: Tower