Methodology 2018

HOUSE AWARDS

The House Awards recognize asset managers for their excellence in a particular investment strategy.

The entries will be assessed by an independent panel of about 80 buy-side judges from Hong Kong, Singapore and Taiwan.  The panel will consist of 60-70% private and premier banking gatekeepers/fund selectors as well as asset owners, and 30%-40% independent consultants and researchers.

Registration is open from 30 July and closes on 29 August. Participants may make submissions until 5 October.  

After that, the judging committee will review the entries and could potentially offer their nominations to parties whom they believe meet high standards but have been too shy to enter.

Take 2 Simple Steps:

    • First, go through an internal self-assessment and decide on the categories you wish to compete in. It could be something you take considerable pride in or an offering you want a candid assessment on by gatekeepers, fund selectors and asset owners.
    • After confirming your registration, you will receive a link to the online submission portal to answer the BENCHMARK questionnaire and to submit attachments to substantiate your responses. The questionnaire is structured according to six pillars which we and the judging panel consider to be key indicators of high quality asset management: 1. Investment philosophy and process; 2. Securities selection and sell discipline; 3. Portfolio construction; 4. Risk and performance management; 5. Environmental, social and governance (ESG) integration into the investment process; and 6. Operations.

We explain the six pillars in further detail below:

Pillar 1: Investment Philosophy and Process

The judges will consider factors such as investment approach and methodology, and the level of commitment to consistently following a stated investment style.

Independent data provided by BENCHMARK for the judges’ reference could include the the number of holdings, min/max position size, fund capacity, tracking error, turnover, use of cash, hedging policy, pricing power, reference benchmark, etc.

Pillar 2: Securities Selection and Sell Discipline

The judges will consider factors such as idea generation; the depth and breadth of research; minimum criteria for a security to be included in the portfolio; and a succinct example of how the team responded when their investment thesis for a security was no longer valid.

Independent data provided by BENCHMARK for the judges’ reference could reflect: attention paid to economic cycles, trends, industry-specific cycles, country or industry bets, structural themes, conviction, etc.

Pillar 3: Portfolio Construction

The judges will consider the key parameters of portfolio construction, how far the portfolio manager can deviate from these; the proportion of active shares; how each security’s weight is determined; etc.

Independent data provided by BENCHMARK for the judges’ reference could reflect: country and sector weightings, number of holdings, dividend yield, P/E of underlying holdings, ROE, historic turnover, the firm’s asset flows for this investment strategy, earnings, debt/capital ratio, efficiency ratio, underlying shares, etc.

Pillar 4: Performance and Risk Management

The judges will consider the major sources of alpha over the last three years, or five years where possible; the use of stress tests; the presence of enterprise risk management, etc.  

Independent data provided by BENCHMARK for the judges’ reference could reflect: returns, quartile/quintile ranking, volatility and risk-adjusted returns, standard deviation, mean, Sharpe ratio, Sortino ratio, etc.

Pillar 5: Environmental, Social and Governance (ESG) Integration into Investment Process

The judges will consider whether the manager has exhibited commitment to integrating ESG considerations into the investment process through clearly disclosed policies and procedures. For example, is ESG used as a risk management tool, as an integral part of valuation, as a part of fundamental research; is ESG analysis applied across all asset classes; who is responsible for ESG in the investment process; and who has veto power over ESG-related decisions.

Pillar 6: Operations

The judges will assess factors such as the fund’s or strategy’s ability to raise funds; the size, tenure and experience of the investment team; the investment team’s turnover rate; the team’s alignment with investors’ interests; regulatory or compliance breaches, etc. 

Submission materials

If you are entering the same category for more than one country, you may use the same flagship product and materials across those countries. Your submission materials will automatically be allotted to the judges assigned to the category.

When you enter a House Award or Manager of the Year Award category, please provide materials of a flagship fund that best reflect the capability and track record of the entered category.

The flagship fund must meet the following criteria:

      • Must have minimum of 3 years’ track record
      • DOES NOT have to be locally authorized/recognized, and could be an offshore fund, SICAV, UCITS/Non-UCITS, Cayman, etc…
      • Must have an ISIN
      • Prospectus
      • Fact sheet (with month end August 2018)22

The Gatekeepers’ Forum: Face-to-Face Presentation to Judges

Upon making an entry, you will be invited to present at The Gatekeepers’ Forum held in mid-October 2018. We endeavor to hold one Forum in Hong Kong and one in Singapore to the best of our efforts, which ultimately depends on the level of participation in each city.

At the Gatekeepers’ Forum, a panel of 20-25 judges will evaluate closed-door presentations by the contestants. 

The Forum has two objectives: first, it gives the contestants’ CIO or portfolio manager an opportunity to personally showcase their capability and to answer questions from the panel. Second, the Forum enables our judges to see the entries from multiple perspectives, which tend to emerge as their peers from a range of institutions ask questions.

The contestants receive bonus points by presenting at the Forum. Each judge has up to 10 bonus points to allocate to each participant. Every asset manager who presents at the Forum is guaranteed one bonus point at the bare minimum for making an effort to attend. On the other hand, participants who forego the Forum will receive zero bonus points.

The bonus points go toward the participant’s aggregate points, which determine a contestant’s standing in the Grand Awards. We select winners of the Grand Awards based on aggregate points for all the categories that a contestant has entered.

Award Categories

Click HERE to see available categories for entry this year.

Separate juries will be devoted to evaluating each product type and selecting the award recipients. Therefore, DO NOT send all your entries under one submission.

The firm with the highest score in the respective category will win the Best-in-Class award. Up to two Outstanding Achiever awards will be given to providers who are within a 5% margin below the Best-in-Class.

MANAGER OF THE YEAR AWARDS

This award aims to recognize an individual who has led his/her team to outstanding and consistent performance over three-year and five-year periods against the benchmark and their peers. In particular, such individuals have demonstrated excellent stewardship in safeguarding shareholders’ capital, and have grown the fund/mandate/strategy’s assets without compromising the safety of investors’ capital and returns.

The judges will evaluate the individual manager’s creativity, forecasting ability, speed and rigor of decision making, response to periods of portfolio or market stress, ethics, risk management, conviction in their decisions and the outcome of the decisions. The individual should preferably also play a key role in stewardship and responsible investing.

Please make a written submission ONLINE of up to 700 words to describe why the nominated manager should receive the award for their respective category, in line with the above criteria. Supplementary documentation can be provided, and there is no limit to the number of supporting documents which can be included.

Click HERE to see available categories for entry this year.

Separate juries will be devoted to evaluating each product type and selecting the award recipients. Therefore, DO NOT send all your entries under one submission.

The firm with the highest score in the respective category will win the Best-in-Class award. Up to two Outstanding Achiever awards will be given to providers who are within a 5% margin below the Best-in-Class.

CAPABILITY AWARDS

Take 2 simple steps:

  1. First, go through an internal self-assessment and decide on the Categories you wish to compete in. It could be something you take considerable pride in or a capability you simply want a candid assessment on by the judging panel.
  2. After confirming your registration, you will receive a link to complete the judging questionnaire online. In addition to responding to the questionnaire, you can attach appendices to support your case. You can provide a hyperlink of a video on the appendix, but do not upload a video to the submission portal, as most judges may find it annoying to download.

Click HERE to see available categories for entry this year.

Separate juries will be devoted to evaluating each product type and selecting the award recipients. Therefore, DO NOT send all your entries under one submission.

The firm with the highest score in the respective category will win the Best-in-Class award. Up to two Outstanding Achiever awards will be given to providers who are within a 5% margin below the Best-in-Class.

TOP FUND AWARDS

BENCHMARK’s top Mutual Funds are selected based purely on quantitative data. This award is designed to help investors identify funds that have both top performance and risk management. While this is an annual award, we believe investors should not base their decisions on short-term performance, but instead seek those managers who have demonstrated strong medium-to-long-term outcomes without subjecting the investors to unnecessary risks.

The top funds are selected through a 2-step process:

1. Filtering

Our initial criteria are as follows. The fund:

  • Must be an open-ended onshore or offshore fund authorized by the Hong Kong SFC
  • Have a minimum fund size of US$100 million
  • Have a minimum three-year track record
  • Must not be a fund with back-end/redemption fees

 
For the Retail class, minimum subscription must be USD 50,000 or below
For the Professional class, minimum subscription must be USD 1.0 million or above
 
2. Scoring:
After arriving at a qualified universe of funds, BENCHMARK will aggregate 12 monthly score sets for each fund between October 1, 2017, and September 30, 2018.
 
Monthly score sets are calculated by aggregating the 12-monthly rolling one-year, three-and five-year (USD) returns, and by adding a risk score for their risk-adjusted returns. Funds in the final score set with a negative Sortino ratio will be excluded from the assessment for the awards.
 
The effective weights of each score set in the calculation are as follows in USD:

  • One-year return: 20%
  • Three-year return: 30%
  • Five-year return: 20%
  • Three-year Sortino ratio: 30%

 
The fund with the highest aggregate score in the category will be awarded the Best-in-Class (BIC) title, and the runner up fund(s) with not more than a 5% margin will be awarded the Outstanding Achiever (OSA) title.

SUSTAINABLE INVESTMENT AWARDS

Take 3 simple steps:

  1. First, go through an internal self-assessment and decide on the Categories you wish to compete in. It could be something you take considerable pride in or an offering you simply want a candid assessment on by the judging panel. At the registration portal, simply choose whether you will be entering the same category for one or more countries.
  2. After confirming the entries, you receive a link to complete the judging questionnaire online.  Your ONLINE submission should include approximately 2,000 words addressing the respective criteria.  It is important to name a sample/flagship fund that best showcases your capability with the following information, as a “ESG Fund Metrics Report” will be drawn from our research partner, MSCI, for judges’ assessment. The fund can be repeated for other categories you’ve entered.
  • The fund DOES NOT have to be locally authorized/recognized
  • Please provide the fund’s ISIN
  • Please provide its Prospectus

Upon making an entry, you will be invited to make a closed-door presentation at The Gatekeepers’ Forum held during mid November 2018. Your presentation will be heard by a sustainable investment panel, comprising judges who specialize in ESG and who are particularly keen to have greater exposure to responsible investments. The Forum abides by Chatham House rules.

The Gatekeepers’ Forum has two objectives: first, it gives the contestants’ CIO or portfolio manager an opportunity to personally showcase their capability and to answer questions from the panel. Second, the Forum enables our judges to see the entries from multiple perspectives, which tend to emerge as their peers from a range of institutions ask questions.

The contestants receive bonus points by presenting at the Forum. Each judge has up to 10 bonus points to allocate to each participant. Every asset manager who presents at the Forum is guaranteed one bonus point at the bare minimum for making an effort to attend. On the other hand, participants who forego the Forum will receive zero bonus points.

The agenda for the Forum and further guidelines will be released on September 10, 2018.

Click HERE for Categories offered for 2018

Separate juries will be devoted to evaluating each product type and selecting the award recipients. Therefore, DO NOT send all your entries under one submission.

The firm with the highest score in the respective category will win the Best-in-Class award. Up to two Outstanding Achiever awards will be given to providers who are within a 5% margin below the Best-in-Class .

GRAND TITLES

Points collected from all stages and all categories will be tabulated towards the delivery of the Provider of the Year and four Group Titles:

GROUP AWARDS

 
  • Best Equity House
  • Best Fixed Income House
  • Best Multi-Assets House
  • Best Sustainable Investment Management House 

The calculation of the four Best Group Houses are as follows: –

Total Quantitative scores within the group:

30%

Total House and Manager of the Year scores within the group:

70%

The Gatekeepers Forum score: Bonus Points

20%

 

PROVIDER OF THE YEAR

 

PROVIDER OF THE YEAR – OFFSHORE: (Only 1 winner)  Fund houses eligible for this category must have their parent company established outside of Hong Kong or the PRC

PROVIDER OF THE YEAR – ONSHORE: (Only 1 winner) Fund houses eligible for this category must have their parent company established in Hong Kong or the PRC

The selection of the Provider of the Year Award has a three-stage process:

Stage 1: Shortlisting candidates based on weighted total scores:

Total overall Quantitative score:

30%

Total overall House and Manager of the Year score:

50%

Total overall Capability score:

20%

The Gatekeepers Forum score: Bonus Points

20%

Stage 2: ESG Analysis of Shortlisted Candidates’ Portfolio

Upon arriving at a list of 5 shortlisted candidates based on the above formula, we randomly select a developed world fund from each of the candidates. The entire holdings of this fund will be put through an ESG Portfolio Analysis by our research partner MSCI. The resulting report will explore the fund houses’ risk management and social responsibility in Environment, Social and Governance, business involvement and exposures in controversial policies. The fund houses’ ESG characteristics will be compared with 1) a relevant MSCI index and 2) a corresponding MSCI ESG index.

Stage 3: Special Committee’s Deliberation and Voting

A special committee will deliberate and vote on the grand title based on information collected throughout the process.  

Announcements of these Grand Titles will be made on the night of the Awards Presentation Ceremony.