Foreword: The qualities of management

By Isabelle de Laminne

The 2021 vintage of the Crystal Funds is special this year, as there are no fewer than five Belgian fund houses in the rankings. This means that half of the awards given are to local managers. A great boost for our Belgian managers!

In a particularly challenging economic and financial environment dominated by the health crisis and low interest rates, managers had to pull out all the stops to include the good companies in their portfolios. This year's winners exhibited many qualities. First, they had to be quite opportunistic. More than ever, it was necessary to invest in the right values at the right time. In particular, sectors stock selection seems to have played a major role. Sometimes the investments paid off. Sometimes they have weighed on fund returns.

Certain managers, who have meekly admitted that they made certain wrong choices, also demonstrate a great deal of transparency. It was also necessary to take the reins and keep their heads above water during the sudden crash of the markets and the subsequent recovery. Some have been farsighted and have adjusted portfolio composition and made certain tactical choices. It is true that certain funds perform better when markets correct, while others prosper when prices rise. Across all asset classes, managers had to be particularly vigilant during these difficult times.

Some stick to their strong beliefs from which they do not deviate. Their consistent choices have determined their performance. Most asset managers seem to be looking optimistically to the future. They seem confidently ready to respond to the pick-up in economic growth and the expected impact of monetary and fiscal support measures. Thanks to the combination of all these qualities, managers have everything they need to continue to perform well.

Classification and methodology

The Crystal Funds awarded by La Libre Belgique and De Standaard can finally be awarded again in the traditional way. After more than a year of pandemics and Covid-19 and repeated lockdowns, the vaccination campaign is finally offering a ray of hope. Stock markets took substantial hits. Many investors panicked and sold their stocks with heavy losses. Subsequently, this correction was seen as a buying opportunity. In November 2020, stock prices finally began to rise again. We also saw a shift toward value stocks in the portfolios.

In the current climate and because of the uncertainty surrounding delta options, it is becoming increasingly difficult to choose among the very (too?) many financial products on the market. Investors all too often go only on the performance of funds. Today, La Libre and De Standaard are presenting awards based on returns between July 1, 2020 and June 30, 2021. This award ceremony highlights the best funds in each category based on their performance. These Crystal Funds are awarded for ten categories of funds: sicavs investing in Belgian equities, sicavs investing in global equities, European equities, American equities, small- and mid-cap equities, sicavs investing in corporate bonds and sicavs investing in government bonds. In addition, three awards are also given to mixed patrimonial sicavs with defensive, neutral and dynamic profiles. The rankings are prepared by Symex and are its responsibility. They are communicated for illustrative purposes only. The editors of La Libre and De Standaard have opted for a simple method. Within each category, funds are ranked according to their "pure" performance, without taking into account the fund's volatility.

That performance is calculated based on one year's performance, from July 1, 2020 to June 30, 2021, which is weighted at 75%. In addition to this performance, the variation in performance over three years is weighted at 25%. Only funds offered to the general public (retail) in Belgium without a minimum entry threshold are included in these rankings. For each nominated award-winning fund, this element was confirmed by the fund issuers. This element is their responsibility, and the editors of the two publications cannot be held liable for it. It should be remembered, however, that performance should not be the only criterion to be considered when choosing a fund. Past performance does not guarantee future returns. We cannot repeat it enough! This ranking is therefore published purely as an indication.

Under no circumstances should these awards and nominations be considered investment advice.

Remember also that asset management is not a sprint but a marathon, to be evaluated over time and over the long term

Winners speak: Patrick Millecam (Fund Manager at Vaue Square)

What is the advantage of investing in a Belgian equity fund?

A Belgian equity fund only invests in Belgian companies. Because these companies regularly appear in the Belgian media, the fact that you can follow these companies better, taste their products or use their products and services gives you better peace of mind. And this is an important trait for an investor not to panic (sell and buy at the wrong time) and thus achieve a good long-term return. Moreover, there are only a few companies that depend solely on the Belgian economy.

A Belgian equity fund also allows you to benefit from economic developments in the rest of the world (Europe, the U.S. and Asia). The merger of the Brussels Stock Exchange with those of Amsterdam and Paris in September 2000 gave Euronext "Brussels" sufficient critical mass as the smallest of the three. This led to better liquidity. Over the period from 30/6/2020 to 30/6/2021, the Belgian All Shares Net Return index increased by 27%.

Value Square Fund Equity Belgium was up 40.4% over the period; the best performance of any Belgian equity fund.

Disclaimer

This article was written at the initiative of De Standaard and was not sponsored by Value Square; it was reproduced in full.