FE fundinfo’s January Crown rebalance reveals resurgence in big investment houses’ performance

FE fundinfo, a leading financial data company, today announced the results of its latest Crown Ratings rebalance. The January rebalance highlights significant movements and trends within the investment fund landscape, with big investment houses returning to the top of the table in an impressive rebound compared to performances two years prior. 

5-Crown Rated Funds 

Overall, seven funds gained a 5-Crown rating for the first time since the last rebalance in July, bringing the total number of 5-Crown rated funds to 356. These newly rated funds entered the rankings directly at the 5-Crown level, representing the top 10% of ‘Crown Scores’, calculated through rigorous performance metrics and benchmark comparisons. 

Sectors and Groups 

In terms of sectors, the top performer was Specialist, with 26.1% of funds receiving a 5-Crown rating. This was followed closely by the Japan sector, which scored 24.6%, and the Sterling Strategic Bond, which scored 21.3%. Both the Specialist and Japan sector outperformed the high rankings they achieved in FE fundinfo’s July Crown rebalance in 2024, where they stood at 23.8% and 21.5% respectively. 

The Europe (excluding UK) sector also delivered strong results, with 17.4% of funds receiving a 5-Crown rating. Regional sectors such as Japan and Europe outperformed the US, largely due to lower market concentration. In the US, the dominance of the ‘Magnificent 7’ stocks continues to heavily influence the S&P 500, making it more challenging for active managers to outperform the benchmark. By contrast, fund managers in Japan and Europe have greater opportunities to identify growth in overlooked stocks, enabling them to deliver stronger results. As a result, the North American sector trailed significantly, with only 2.6% of funds earning 5-Crown ratings. 

Among the groups, investment houses with a valuation focus returned to the top of the table this rebalance. Artemis saw an improvement, with seven of its 22 funds earning 5-Crown ratings, up from five in July. Similarly, out of Invesco’s 48 funds, 14 achieved 5-Crown ratings, up from ten six months ago. Both firms have had an impressive rebound in their fund performance compared to performances from three years ago. 

In terms of challenges in the sector, there were less winners in the Sterling High Yield sector this rebalance, with 0% of funds securing the 5-Crown rating. A sustained credit rally over the past three years has driven fund managers to adopt a cautious approach and avoid higher-risk investments. 

Small caps also struggled over the last six months in an overly concentrated market. Since 2021, receding interest rates have negatively impacted the performance of growth-sensitive funds, reflecting ongoing challenges in the sector.

Charles Younes, Deputy Chief Investment Officer at FE fundinfo, commented: 

“Inflation remained persistently above target in the second half of 2024, compelling central banks to maintain restrictive policies, while portfolios with high-interest rate sensitivity faced another difficult six months. 

“Against this backdrop, funds such as MAN Group’s Sterling Corporate Bond Fund and Royal London Global Equity Select Fund delivered exceptional performances. Both achieved 5-Crown ratings for their ability to deliver consistent returns for investors and maintain foresight in volatile economic environments.” 

Methodology  

FE fundinfo Crown Ratings are calculated by building up a score. The score is made up of three parts, and each part is calculated by reference to a benchmark for the fund.

The calculations only have meaning if that benchmark provides a good basis for understanding the performance of that fund. 

Funds are assigned ratings based on their total scores, according to the following distribution:   

• the top 10% - five FE fundinfo Crowns 

• the next 15% - four FE fundinfo Crowns 

• the next 25% - three FE fundinfo Crowns 

• the next 25% - two FE fundinfo Crowns 

• the bottom 25% - one FE fundinfo Crowns 

Charles Younes, Deputy Chief Investment Officer at FE fundinfo, added:    

“Crown ratings offer investors an opportunity to compare and contrast the performance of a fund over an extended period of time and throughout different market conditions. As the last three years have shown significant and quick market rotation, the Crown ratings are more important than ever to give a solid quantitative assessment of a fund’s performance over a market cycle.”  
 
For more information, please visit fefundinfo.com.