Truffle Asset Management wins big at the Morningstar awards

Truffle Asset Management won big at the 2023 Morningstar Fund Awards – South Africa, which were announced on Friday.

The seven fund-category and two fund-house awards are based on Morningstar’s fund data as of 31 December 2022.

The independent investment provider says the annual awards recognise those funds and asset managers that added the most value for investors within key sectors and across asset classes.

Truffle was named the Best Fund House: Smaller Fund Range for the second consecutive year. The Truffle SCI Income Plus Fund was the Best Bond Fund, also for the second year in a row. It has returned 7.1% a year over the three years to the end of 2022.

The two Nedgroup Investments portfolios that Truffle manages – the Nedgroup Investments Managed Fund and the Nedgroup Investments Balanced Fund – won in the Best Aggressive Allocation Fund and the Best Moderate Allocation Fund categories, respectively.

Both funds are in the South Africa multi-asset high-equity sub-category, but the Managed Fund is a domestic-only portfolio. It returned 13.4% a year over the three years to the end of December, placing it fourth out of 189 funds in the sub-category. The Balanced Fund returned 11.4% over the same period, to rank eleventh. Over five years to the end of 2022, they ranked second and third in the sub-category, respectively, with annualised returns of 12.1% and 11.4%.

The Truffle SCI Flexible Fund was nominated in the Best Flexible Allocation Fund category, but lost out to the Gryphon Prudential Fund, which returned 10.1% over five years to the end of December and 12.6% over three years. This was Gryphon Asset Management’s first win at the Morningstar Awards.

Another first-time winner was Sanlam Investments Multi-Manager. The Sanlam Multi Managed Cautious Fund of Funds won the award for the Best Cautious Allocation Fund, which is classified as a South African multi-asset low-equity fund. It returned 9.3% over three years to the end of December and 8.4% over five years.

The Merchant West SCI Value Fund (formerly the Counterpoint SCI Value Fund) won the Best South African Equity Fund award for the second consecutive year. The fund, managed by Piet Viljoen, has returned 18.3% over the past three years.

The only international winner was the Schroder ISF Global Sustainable Growth Fund, which won in the Best Global Equity Fund category. The fund has returned a cumulative 32.4% in dollar terms over the past three years.

CoreShares Asset Management won the award for Best Fund House: Larger Fund Range. Satrix won this award in 2021 and 2022.

Method document

Morningstar selects the winners using a quantitative methodology, and eligible funds require a five-year performance track record. Weightings of one-, three-, and five-year performance are factored into the methodology, along with a qualitative overlay.

The methodology document states that although the awards emphasise the one-year period, “funds must have also delivered strong three- and five-year returns after adjusting for risk within the awards peer groups to obtain an award.

“Further, they must have been at least in the top half of their respective peer groups in at least three of the past five calendar years. We believe this combination will ensure that the awards are given to funds which have earned strong one-year results and have also shown they have the ability to earn strong long-term returns without undue risk.”

Morningstar says that in selecting winners, fund returns are adjusted for risk using the Morningstar Risk, a measure which imposes a higher penalty for downside variation in a fund’s return than it does for upside volatility.