In its International Equities Review 2013, the company found that those managers who beat the benchmark were ones that had a “clearly articulated investment process” and a thorough understanding of the stocks they were investing in.
“We’ve proven over time that it’s manager skill and the investment process that determine if a manager can outperform their peers over the long term,” van Eyk lead analyst Nimalan Govender told InvestorDaily.
“There’s a constant danger that investors who don’t have access to this sort of research will chase past performance when looking at which manager to invest in. Most investors who do this will end up disappointed,” he added.
In the review, van Eyk examined 43 managers, awarding four funds’ strategies the top rating of AA.
This was an improvement on last year when no-one received the top rating.
A further 15 strategies received an A-rating, while nine funds were screened from the process because they were deemed not sufficiently competitive.
Managers who rated highly in the review delivered excessive returns beyond the benchmark in a highly volatile market.
“Managers needed to show they had the ability to deliver returns in excess of the benchmark, given the heightened risk of volatile market conditions going forward,” Mr Govender said.
The report also highlighted the sharp risks coming from western countries that are continuing their quantitative easing policies.
“There are risks for international equities around the strength of the US economy and Europe. If the US weakens sharply or the crisis in Europe erupts again it would also affect Chinese growth and you could see international equities hit quite hard,” Mr Govender said.
The research house particularly praised funds like Platinum International Brands, for their bottom up research in implementing investment strategies.
“These people don’t just pick up the Financial Times in the morning for their ideas,” Mr Govender said.
