On 17 March, we will announce our annual Morningstar 2016 Fund Award winners. The core methodology remains the same, however, we have reduced the number of category awards given to highlight offerings in core sectors that we believe are the most relevant in helping local investors make more informed decisions and achieve a better experience.
Methodology remains the same
Although the number of awards and the categories in which they are given are changing this year, the awards retain the same methodology combining quantitative scoring with the qualitative judgment of our analyst team. They are designed to recognise strong performance during the year in question, but they do not simply reward one year returns. Indeed, the best funds over one year have all too often just gotten lucky rather than demonstrated real skill. We therefore evaluate three years of history in our awards process and it takes more than strong returns to merit consideration. We also place a heavy emphasis on risk in our calculation and our analysts look at factors such as the consistency of returns, changes to management and outsized risks that might be embedded in the portfolio. You can read the full methodology here.
New for 2016
We will give the following five category awards in 2016, down from seven in 2015. We have dropped awards in the allocation category - Malaysia Ringgit and Islamic Malaysia Ringgit Each fund is still judged relative to its own category peers. After this assessment, we determine which offering from each of the combined categories has distinguished itself most versus its own category.
Equity:
- Malaysia Large-cap Equity
- Malaysia Large-cap Equity (Syariah)
- Asia-Pacific Equity (Asia-Pacific ex Japan Equity, Asia-Pacific Equity)
Fixed Interest:
- Malaysia Bonds
- Malaysia Bonds (Syariah)
In all, we think the changes will result in a clearer expression of those funds that have shown the most merit in the context of the awards criteria and should ultimately help promote a better investor experience.
