Sasfin’s Morningstar Award adds to a Raging Bulls win

28 February, Cape Town: After last month's win at the Raging Bull Awards, once again Sasfin Asset Managers and Philip Bradford took top honours at last night’s Morningstar 2020 South Africa Fund Awards held in Cape Town. Sasfin Asset Managers collected the award for the Best Moderate Allocation Fund for the Sasfin BCI Balanced Fund.

“I’m very happy that we have been recognised for our ability to give our investors excellent returns with less risk. We did this by dynamically changing our asset allocation to not only take advantage of great investment opportunities but also reduce the risk for our investors at the right time. Essentially we were able to beat our competitors by taking less risk, not more, which is a great result for our investors,” says Bradford, Chief Investment Officer at Sasfin Asset Managers.”

The Morningstar Awards recognise funds and fund houses that added the most value for investors within the context of their relevant peer group in 2019 and over longer time periods. Morningstar selects the finalists using a quantitative methodology with a qualitative overlay that considers the one-, three-, and five-year performance history of all eligible funds, and adjusts returns for risk using Morningstar Risk, a measure that imposes a higher penalty for downside variation in a fund’s return than it does for upside volatility.

Bradford said he remains cognisant of the importance of a combination of vigilance, expertise and diligence to remain in a leading position for investors: "We remain very cautiously positioned because of a number of risks that are impacting markets. Locally, we have South Africa’s economic and fiscal challenges and a potential downgrade by Moody’s in March. Whilst globally we need to deal with potentially slowing economic growth, expensive equity markets, and now a potential Coronavirus pandemic which could be severely negative for both developed and emerging markets. He adds, "But a low growth environment is one that is typically better to hold bonds because interest rates are likely to be cut further."

In terms of the Fund’s asset allocation tactics, over the last few years, Bradford’s team significantly reduced their investors’ exposure to local equities and increased their exposure to offshore equities and high yielding, lower risk assets like bonds. He says that at times of maximum pessimism, bonds offering yields of over 11% were bought for the Fund to lock in these inflation-beating returns for their investors.

Bradford explains that the Fund is actively managed and invests across all available asset classes, both local and global, with the objective of providing inflation-beating returns with global diversification. The large majority of the investors are pension funds that are looking for long-term growth. “There are times when it makes sense to be invested in equities and there are times that you need to be cautious. Our flexibility has allowed us to correctly make these important decisions for investors over the last 5 years,” says Bradford.

Morningstar Research (Pty) Limited, a subsidiary of Morningstar, Inc. (NASDAQ: MORN), is a leading provider of independent investment research. The annual awards recognise funds and fund houses that added the most value for investors within the context of their relevant peer group in 2019 and over longer time periods. Morningstar selects the finalists using a quantitative methodology with a qualitative overlay that considers the one-, three-, and five-year performance history of all eligible funds, and adjusts returns for risk using Morningstar Risk, a measure that imposes a higher penalty for downside variation in a fund’s return than it does for upside volatility. Tal Nieburg, Managing Director for Morningstar South Africa, said this approach ensures that fund managers who consistently deliver top returns are rewarded. “This year’s finalist funds and fund houses deserve recognition for delivering strong risk-adjusted returns for investors over the past year and over the longer-term, despite short-term market volatility.”