STEPHEN CRANSTON: The star turn
The average Morningstar fund rating is consistently and materially higher for the 10 largest funds than for funds with less than R500m
There are close to 2,000 unit trusts in SA. But as the highly concentrated nature of the asset management industry suggests, just a few dominate. According to research from Nedgroup Multimanagers head Trevor Garvin, if you take the 395 funds in the low equity, high equity and general equity categories, the 10 largest funds in each category manage 70% of the assets. These are run by the big-brand fund managers such as Coronation, Allan Gray, Investec and Prudential.
Marketing is one factor in the success of these firms — they have large advertising budgets and large teams. In contrast, the fund houses that run smaller funds could not make up the numbers for a barbershop quartet...
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