At City House Investors we choose active investment managers with a proven track record. We only include active fund managers within our Portfolios that have been awarded the prestigious FE Alpha Manager Rating. These ratings are designed to distinguish fund managers who have consistently performed well over the longer term. By rating the performance of a fund manager over their entire career. This includes all funds they have managed at different fund management companies. Here are the current Alpha Rated Managers that we include in our portfolios.
The FE Alpha Manager Ratings robust methodology is comprised of two key components.
These ratings recognise a manager’s ability to create risk-adjusted alpha. This means outperformance in both rising and falling markets, and those who consistently beat their sector peers.
Risk adjusted alpha/Sortino (with track record length bias) and consistent outperformance of a benchmark overall. The calculation period runs from the 1st January 2000, essentially identifying managers with the strongest long term performance.
In some sectors there is no manager currently that has been awarded the FE Alpha Manager Rating. We believe this indicates that there is not currently a manager that can constantly outperform. We include low cost index tracking funds in this instance.
Firstly we narrow our universe to funds run by Alpha Rated Managers. Next we refine this universe with the additional filters of FE Crown Fund Ratings and Morningstar Analyst Ratings. This determines our current fund selection.
FE Crown Fund Ratings
FE Crown Ratings allow us to distinguish between funds that are strongly outperforming their benchmark and those that are not. They take into account three key measurements to derive a fund’s performance: alpha, volatility and consistently strong performance.
Morningstar Analyst Rating
The Morningstar Analyst Rating is the summary expression of Morningstar’s forward-looking analysis of a fund. Their Analysts evaluates funds based on five key pillars. Process, Performance, People, Parent, and Price. Which its analysts believe lead to funds that are more likely to outperform over the long term on a risk-adjusted basis.