Glacier Research spends a lot of time gathering and analysing data, which does not only include quantitative information such as performance, but also fund manager characteristics such as manager age, tenure, undergraduate university attended, whether the manager holds a CA, CFA or MBA qualification, investment team size, investment team diversity focussing on female and employment equity representation, co-investment, share ownership, investment style, decision-making (intuition vs. model and individual vs. team) and company affiliation.
So we are getting better and better at understanding fund managers at an individual level. But what does the South African fund management industry look like collectively - from an aggregate level?
Glacier Research recently conducted a study with SA fund managers that provides a unique aggregate view of the industry. The results can be used to benchmark and compare fund managers using specific fund manager characteristics, rather than conventional performance and risk.
The data set was collected over the course of 2017 and comprised of 146 funds across the ASISA Multi Asset Low Equity (LE), Medium (ME) Equity, High Equity (HE), Flexible Equity (FE), and General Equity (GE) categories. We selected these categories because they have attracted the most assets over the last few years. The sample excluded all multi-managed funds and fund of funds. LE represented 21%, ME 10%, HE 28%, FE 21%, and GE 63% of the funds. The HE category is the largest by AUM, attracting 47% of AUM, while the ME category is the lowest attracting 4% of AUM. The study used five-year performance (measured by cumulative net returns) and risk (measured by standard deviation) figures for the period 1 January 2012 – 31 December 2016. It is important to note that for the purposes of the exercise, overall performance and risk was averaged across fund categories depending on the fund manager characteristic in question.
We will now look at some of the more interesting results on the study, focussing on manager age, tenure, undergraduate university attended, whether the manager holds a CA, CFA or MBA qualification, investment style and company affiliation.