Morningstar Singapore Fund Awards 2012 has come to a successful end. The results were announced on 21 March 2012. The Morningstar Singapore Fund Awards 2012 recognize retail funds and fund groups that added the most value for investors within the context of their relevant peer group in 2011 and over the longer term. Winners are selected using a quantitative methodology with a qualitative overlay developed by Morningstar 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.
Ms. Cynthia Case, Vice President of Sales for Morningstar Asia, said, “It has been 10 years since we brought Morningstar Awards to Asia. ‘Investors First’ remains one of our core values, and we have emphasized quality over quantity by selecting just twelve category winners this year”.
Mr. Sunny Ng, Director of Asia Fund Research for Morningstar Asia, shared his views on the fund industry in Asia, and in particular discussed fund ownership levels in the region. “While the wealth of individuals in Asia continues to grow at a record pace, fund ownership in most Asian countries remains well below 10%. This is significantly lower than their Western counterparts, especially the United States where it is nearly 50%”. He noted that, “There are three major barriers to fund ownership growth in the region: short-term performance orientation, high distribution/management fees and misalignment of interests between investors and asset managers”.
To unlock the growth of Asia’s fund management industry, Ng proposes that potential catalysts could be investor education and responsible product development. At the moment, much of the focus in terms of product development in Asia is on trendy short-term funds that are easy to sell. These products often charge higher management and up-front fees (as distributors and asset managers have shorter time periods to break even) and are often the best performers of yesteryear. Products that chase past performance can create poor investment outcomes for investors, which ultimately leads to rapid redemptions. More responsible product development coupled with proper investor education could help break the cycle and encourage a prosperous and stable funds industry in the region.
Morningstar strives to educate and inform investors so that they achieve better investment outcomes. We encourage investors to invest for the long term and help them choose the most suitable products. We hope that this drives a sustainable and growing asset base in Asia, which will help the fund management industry grow and develop products to meet investor needs.
DBS Bank shares the same value with Morningstar, thus an intact relationship is developed. Brandon Lam, the Senior Vice President and Head of Consumer Investment & Insurance Products for Consumer Banking Group in Singapore for DBS Bank, said, “Since the later part of 2010, DBS Bank has engaged Morningstar to provide insights on asset allocation, fund selection, and useful tools to enhance the suite of investment advisory services that we offer to clients. As a bank that takes pride in providing strong Asian insights to clients, the bank also partnered Morningstar on a strategic asset allocation model that put forth our requirements of having an Asia-centric investment portfolio. This strategic asset allocation model has been incorporated in the DBS Asia Asset Allocator fund to provide an avenue for our retail investors to invest in a well-diversified portfolio that takes into account the asset class views from our chief investment office."
The winners of the Morningstar Singapore Fund Awards 2012 are:
Equity Fund Category | Fund Winner |
Asia ex-Japan Equity | First State Asian Growth Fund |
Asia-Pacific Equity | Aberdeen Select Portfolio - Aberdeen Asian Smaller Companies Fund SGD |
Europe Large-Cap Equity | BNP Paribas L1 Equity Europe Growth Classic D |
Global Emerging Markets Equity | First State GEM Leaders Fund |
Global Large-Cap Equity | Aberdeen Select Portfolio - Aberdeen Global Opportunities Fund SGD |
Greater China Equity | First State Regional China Fund |
Japan Large-Cap Equity | Aberdeen Select Portfolio - Aberdeen Japan Equity Fund SGD |
Singapore Equity | Aberdeen Select Portfolio - Aberdeen Singapore Equity Fund SGD |
US Large-Cap Equity | ING (L) Invest US High Dividend P Cap |
Fixed Income Fund Category | Fund Winner |
Asia Bond | ABF Pan Asia Bond Index Fund |
Global Bond | Legg Mason Brandywine Global Fixed Inc A Income (S) $ |
High Yield Bond | Fidelity Funds - US High Yield Fund A-MDIST-USD |
For more information about the awards and the methodology, please click here.
