MUTUAL FUNDS - METHODOLOGY 2019

HOUSE AWARDS

Eligibility

Although this program assesses investment strategies rather funds, we ask for factsheets and other information related to the flagship fund. The flagship fund must meet the following criteria:

  • Must have minimum 3 years’ track record
  • DOES NOT have to be locally authorized/recognized, and could be an offshore fund, SICAV, UCITS/Non-UCITS, Cayman, etc.
  • Must have an ISIN or LipperID
  • Prospectus
  • Fact sheet (for month end June 2019)

Key Changes to Methodology in 2019

For an overview of how we’ve refined the methodology in 2019, click HERE  to view the “New in 2019” section.

Holistic Assessment

BENCHMARK and the buy-side community believe that investment strategies are best evaluated holistically rather than over-emphasizing past returns and risk metrics. In that light, our assessment is based on multiple facets of portfolio and risk management as well as corporate strength. We see these facets as interlocking pieces forming a whole picture. There will be 5 pillars, ranging from Investment Approach to Corporate Strength.

For a full description of the 5 Pillars of evaluation and full methodology, please email Christopher Hay at chris.hay@wealthasia.net

Scoring

In consultation with our panel of 60-70 buy-side jurors – consisting of 60-70% private and premier banking gatekeepers/fund selectors as well as asset owners, and 30%-40% independent consultants and researchers – we’ve designed a questionnaire, multiple-choice answers and a scoring system.

There are 2 levels of scores:

  • Level I Score: All participants are scored based on the multiple-choice answers they provided. This score is objective in the sense that every response has a corresponding score that is applied uniformly to every participant.
  • Level II Score: The top 5 in every peer group, according to Level I scores, proceed to Level II scoring. At this stage, the jurors assigned to a particular peer group will score the top 5. The Level II score is relatively subjective, as it relies on the assessment of the jurors. Each juror has a different way of interpreting the information provided by a fund and every juror has a different set of priorities, often guided by the needs of their family office or investors. Some jurors combine both the information provided through BENCHMARK and the information they collected themselves, usually through previous contact with the asset manager or other means.
  • The final score is a weighted combination of Levels I and II.

In summary, all participants receive a Level I score. From the Level I scores, we shortlist the top 5 in every category or peer group, and these top 5 progress to Level II scoring.

For a full description of our scoring and full methodology, please email Christopher Hay at chris.hay@wealthasia.net

Winner Selection

The strategy with the highest final score in its peer group wins the Best-in-Class award. Up to two Outstanding Achiever awards will be given to strategies who are within a 5% margin below the Best-in-Class.  

Submitting Materials for Multiple Countries

If you are entering the same category for more than one country, you may use the same information, documents and flagship fund across all the countries. For example, you’ve entered your global fixed income strategy for Hong Kong, Singapore and Taiwan. You may use the same information for all three countries.

Submitting Materials for Multiple Strategies

Separate groups of jurors will evaluate different product types, so please make one submission per strategy. DO NOT send one submission to represent different strategies. For example, your global fixed income and Asia equity strategies are participating. Please submit separate entries for each strategy, with the exception of Pillar 5-Corporate Strength.

The Gatekeepers’ Forum: Face-to-Face Presentation to Judges

Upon registering, you will be invited to present at The Gatekeepers’ Forum (TGF) to be held in mid- to late-October 2019. You do not need to be among the top 5 in your peer group in Level I Scoring to present at TGF.

We endeavor to hold one Forum in Hong Kong and one in Singapore to the best of our efforts, which ultimately depends on the level of participation in each city.

TGF is a closed-door session in which a panel of jurors holds a two-way conversation with your portfolio manager.

We welcome video conferences with PMs who are not in Hong Kong or Singapore.  

The Forum has two objectives: first, it gives the contestants’ CIO or portfolio manager an opportunity to personally showcase their capability and to answer questions from the panel. Second, the Forum enables our judges to see the entries from multiple perspectives, which tend to emerge as their peers from a range of institutions ask questions.

Participants who present at TGF receive bonus points. Each judge has up to 10 bonus points to allocate to each participant. Every asset manager who presents at the Forum is guaranteed one bonus point at the bare minimum for making an effort to attend. On the other hand, participants who forego the Forum will receive zero bonus points.

The bonus points go toward the firm’s scores in the Best Practice Awards, specifically toward the Investor Alignment, ESG Integration, Transparency and Corporate Quality Awards.

The agenda for the Forum will be released in September, along with specific guidelines.

For a full description of The Gatekeepers’  Forum and full methodology, please email Christopher Hay at chris.hay@wealthasia.net

Award Categories

Click HERE to see available categories for entry this year.

Key Dates

Click HERE to see registration and submission deadlines and other key dates.

MANAGER OF THE YEAR AWARDS

This award aims to recognize an individual who has led his/her team to outstanding and consistent performance over three-year and five-year periods against the benchmark and their peers. In particular, such individuals have demonstrated excellent stewardship and have grown the fund/mandate/strategy’s assets without compromising the safety of investors’ capital and returns.

The judges will evaluate the individual manager’s creativity, forecasting ability, speed and rigor of decision making, response to periods of portfolio or market stress, ethics, risk management, conviction in their decisions and the outcome of the decisions. The individual should preferably also play a key role in stewardship and integrating ESG into the investment process.

Please make a written submission ONLINE of up to 700 words to describe why the nominated manager should receive the award for their respective category, in line with the above criteria. Supplementary documentation can be provided, and there is no limit to the number of supporting documents which can be included.

Separate juries will be devoted to evaluating each product type and selecting the award recipients. Therefore, DO NOT send all your entries under one submission.

The firm with the highest score in the respective category will win the Best-in-Class award. Up to two Outstanding Achiever awards will be given to providers who are within a 5% margin below the Best-in-Class.

Award Categories

Click HERE to see available categories for entry this year.

Key Dates

Click HERE to see registration and submission deadlines and other key dates.

TOP FUND AWARDS

This award is designed to help investors identify funds that have both top performance and risk management. The winners are selected based on our performance and risk formula, as explained below.

While this is an annual award, we believe investors should not base their decisions on short-term performance, but instead seek those managers who have demonstrated strong medium-to-long-term outcomes without subjecting investors to unnecessary risks.

The top funds are selected through a 2-step process:

1. Filtering

Our initial criteria are as follows. The fund:

  • Must be an open-ended onshore or offshore fund authorized by the Hong Kong SFC
  • Have a minimum fund size of US$100 million
  • Have a minimum three-year track record
  • Must not be a fund with back-end/redemption fees

For the Retail class, minimum subscription must be USD 50,000 or below
For the Professional class, minimum subscription must be USD 1.0 million or above

2. Scoring:
After arriving at a qualified universe of funds, BENCHMARK will aggregate 12 monthly score sets for each fund between October 1, 2018 and September 30, 2019.

Monthly score sets are calculated by aggregating the 12-monthly rolling one-year, three-and five-year (USD) returns, and by adding a risk score for their risk-adjusted returns. Funds in the final score set with a negative Sortino ratio will be excluded from the assessment for the awards.

The scores are weighted as follows:

  • One-year return: 20%
  • Three-year return: 30%
  • Five-year return: 20%
  • Three-year Sortino ratio: 30%

The fund with the highest aggregate score in the category will be awarded the Best-in-Class (BIC) title, and the runner up fund(s) with not more than a 5% margin will be awarded the Outstanding Achiever (OSA) titles.

SUSTAINABLE INVESTMENT AWARDS

Take 3 simple steps:

  1. First, go through an internal self-assessment and decide on the Categories you wish to compete in. It could be something you take considerable pride in or an offering you simply want a candid assessment on by the judging panel. At the registration portal, simply choose whether you will be entering the same category for one or more countries.
  2. After confirming the entries, you receive a link to complete the judging questionnaire online.  Your ONLINE submission should include approximately 2,000 words addressing the respective criteria.  It is important to name a sample/flagship fund that best showcases your capability with the following information, as a “ESG Fund Metrics Report” will be drawn from our research partner, MSCI, for judges’ assessment. The fund can be repeated for other categories you’ve entered.
  • The fund DOES NOT have to be locally authorized/recognized
  • Please provide the fund’s ISIN or LipperID
  • Please provide its Prospectus

Upon making an entry, you will be invited to make a closed-door presentation at The Gatekeepers’ Forum. Your presentation will be heard by a sustainable investment panel, comprising judges who specialize in ESG and who are particularly keen to have greater exposure to responsible investments.

The Gatekeepers’ Forum has two objectives: first, it gives the contestants’ CIO or portfolio manager an opportunity to personally showcase their capability and to answer questions from the panel. Second, the Forum enables our judges to see the entries from multiple perspectives, which tend to emerge as their peers from a range of institutions ask questions.

The contestants receive bonus points by presenting at the Forum. Each judge has up to 10 bonus points to allocate to each participant. Every participant who presents at the Forum is guaranteed one bonus point at the bare minimum for making an effort to attend. On the other hand, participants who forego the Forum will receive zero bonus points.

The agenda for the Forum and further guidelines will be released on September 10, 2018.

Separate juries will be devoted to evaluating each product type and selecting the award recipients. Therefore, DO NOT send all your entries under one submission.

The firm with the highest score in the respective category will win the Best-in-Class award. Up to two Outstanding Achiever awards will be given to providers who are within a 5% margin below the Best-in-Class .

Award Categories

Click HERE to see available categories for entry this year.

Key Dates

Click HERE to see registration and submission deadlines and other key dates.

BEST PRACTICE AWARDS

Points collected from all stages and all categories will be tabulated towards the Best Practice Awards.

  • Investor Alignment
  • ESG Integration
  • Transparency
  • Corporate Quality – Onshore
  • Corporate Quality – Offshore

HOW THE BEST PRACTICE TITLES ARE CALCULATED  

Most Aligned with Investors Award

In the questionnaire, the relevant multiple-choice answers are tagged “investor alignment” and each answer has a corresponding score.  All scores under “investor alignment” will be totaled for every participating strategy. If a firm has submitted more than one strategy, this score will be an average of all the submissions’ “investor alignment” scores. For example, 5 strategies from your firm are participating. The “investor alignment” scores from all 5 strategies will be totaled and divided by 5.

Any “investor alignment” score you earned at The Gatekeepers’ Forum will be added to the average score as a bonus.

The firm with the highest score will win the Investor Alignment Award.

Transparency Award

In the questionnaire, the relevant multiple-choice answers are tagged “transparency” and each answer has a corresponding score.  All scores under “transparency” will be totaled for every participating strategy. If a firm has submitted more than one strategy, this score will be an average of all the submissions’ “transparency” scores. For example, 5 strategies from your firm are participating. The “transparency” scores from all 5 strategies will be totaled and divided by 5.

Any “transparency” score you earned at The Gatekeepers’ Forum will be added to the average score as a bonus.

The firm with the highest score will win the Transparency Award.

ESG Integration Award

In the questionnaire, the relevant multiple-choice answers are tagged “ESG integration” and each answer has a corresponding score.  All scores under “ESG integration” will be totaled for every participating strategy. If a firm has submitted more than one strategy, this score will be an average of all the submissions’ “ESG integration” scores. For example, 5 strategies from your firm are participating. The “ESG integration” scores from all 5 strategies will be totaled and divided by 5.

Any “ESG integration” score you earned at The Gatekeepers’ Forum will be added to the average score as a bonus.

The firm with the highest score will win the ESG Integration Award.

Corporate Quality Award

In the questionnaire, the relevant multiple-choice answers are tagged “corporate strength” and each answer has a corresponding score.  All scores under “corporate strength” will be totaled for every participating strategy. If a firm has submitted more than one strategy, this score will be an average of all the submissions’ “corporate strength” scores. For example, 5 strategies from your firm are participating. The “corporate strength” scores from all 5 strategies will be totaled and divided by 5.

Any “corporate strength” score you earned at The Gatekeepers’ Forum will be added to the average score as a bonus.

The firm with the highest score will win the Corporate Quality Award.