Citywire Elite Companies is focused on highlighting the best investment ideas of the world’s top portfolio managers through our unique company ratings.
A key part of this process is selecting the very best investors of the more than 10,000 equity fund managers Citywire tracks around the world. Only the stocks that these investors back receive Citywire Elite Companies ratings.
After a fresh round of number crunching, Citywire Elite Companies can reveal the managers who have been admitted to this select group after passing our stringent performance tests.
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Only 276 fund managers, representing less than 3% of the professional investors Citywire tracks globally, meet our exacting criteria.
That’s down from 379 at the previous reshuffle and comprises 93 who have survived the latest performance tests and 183 new entrants.
These Elite Investors run more than $300bn across 73 countries. Unsurprisingly, a large proportion of them manage funds investing in the US, the world’s largest stock market, but much smaller markets are represented too,including New Zealand, Denmark and Chile.
As a group, they are the definitive best-performing investors in their markets and all are at the top of the game. Click here to discover each fund manager to have secured Elite Investor status.
How it works
Our tests highlight portfolio managers who have consistently outperformed the market they invest in over the past four years.
We’ve analysed the performance of 10,303 fund managers running a combined $8tn over 12 rolling three-year periods covering the 48 months from the start of August 2019 to the end of July this year.
To qualify, managers must not only have beaten their benchmark but be ranked among the top 30% of performers who did so in nine of these 12 rolling three-year periods,including the most recent three. We calculate performance using the ‘manager ratio’, which measures how much they have outperformed relative to the risk they have taken on.
Value investors in favour
Regularly running our performance tests ensures our select group of Elite Investors reflects prevailing investment styles. This time around, managers with a value focus are strongly represented. For example, while 44 of our Elite Investors run US value funds, only two are at the helm of funds searching for US growth stocks.
That’s a result of the market conditions over the past four years. The severity of the selloff in growth stocks throughout 2022 made it exceptionally difficult for managers focused on this part of the market to pass our Elite Investor performance test, given its emphasis on consistency of returns over that period.
Growth stocks have started to recover this year, however, and should that trend continue we would expect more growth-focused fund managers to join the ranks of our Elite Investors in future reshuffles.
Changes to our Elite Investor lineup mean changes to our Citywire Elite Companies ratings. Companies are rated from the highest AAA rating to AA, A and + according to these top-performing fund managers’ positions in their shares. So when these investors buy and sell shares in companies, those companies move up and down the ratings. But company ratings also change when the lineup of Elite Investors changes – as new managers enter, their high-conviction positions attain Citywire Elite Companies ratings. We’ll be running through some of the big changes over the next week.
What about Citywire manager ratings?
Our Elite Investor test differs from Citywire’s portfolio manager ratings in two crucial respects. Firstly, in the time period examined: whereas portfolio manager ratings examine performance over a single timeframe – the past three years – our Elite Investor test analyses 12 rolling three-year timeframes over a four-year period.
The result is that our Elite Investor test is harder to pass. While around a quarter of the fund managers Citywire tracks qualify for a portfolio manager rating, less than 3% achieve Elite Investor status.
Secondly, while Citywire’s portfolio manager ratings deliver a verdict on a manager’s returns across all the funds they run, our Elite Investor test is focused on their performance in a particular market.
This means that not all Elite Investors also receive Citywire’s top AAA portfolio manager rating, and in a small number of cases they are not rated at all.
Take new entrants Martin Wirth and Raik Hoffman as examples. While both are Elite Investors, neither has qualified for a Citywire portfolio manager rating. That’s down to the poor performance of the eurozone fund they run, FPM Funds Ladon. Yet their two German funds, FPM Funds Stockpicker Germany All Cap and Small/Mid Cap, have beaten all-comers: both are top of their Citywire sectors over the past three years.
Their performance on these funds earns them their status as Elite Investors, with their buying and selling of shares in the two portfolios – but not the poorly performing eurozone fund – counting towards the Citywire Elite Companies ratings.
