Natural resource and energy strategies dominated equity rankings in Morning-star's Separate Account/CIT Fund Data-base for the year ended March 31.
Seven of the top 10 portfolios in overall domestic equity in the separate account universe were natural resource specialty portfolios or strategies. Credit Suisse Asset Management, New York, was the No. 1 manager in the composite U.S. stocks segment with a gross return of 40.08% for its total commodity return GSCI portfolio, which Morningstar categorizes as a specialty-natural resource strategy. BlackRock Inc., New York, was No. 2 with its all-cap global resources portfolio, which yielded 37.99%. OFI Institutional Asset Management, Boston, was third with its commodities strategy at 37.44%.
The median manager in the overall equity category returned -5.74% for the year ended March 31. The Russell 3000, by comparison, returned -6.06% for the same period.
The three strategies in the top 10 that Morningstar didn't classify as specialty natural resource funds were the midcap blend core equity composite of Harman Investment Advisors Inc., Chicago, at 36.41%; the specialty precious metals tactical asset allocation portfolio of AIS Capital Management, Wilton, Conn., at 35.05%; and the large-cap equity strategy of MFC Global Investment Management, Boston, at 27.03%.
Christopher Burton and Andrew Karsh, co-portfolio managers of the Credit Suisse strategy, said their fund closely follows the S&P GSCI index, which was up 38.6% for the year. Credit Suisse has $2.7 billion in global commodity assets.
The Credit Suisse portfolio did slightly better than the benchmark because of the timing of rolling futures contracts. The benchmark assumes contracts will be rolled over at a certain time. “We were better at the timing of the rollovers than the benchmark,” Mr. Burton said.
Mr. Karsh said the key driver of the fund's performance for the year was holdings in the energy sector and exposure to agriculture and industrial metals. In particular, wheat benefited from the falling U.S. dollar, which made the U.S.-grown grain attractive to foreign buyers. Energy and industrial metal holdings benefited from growth in emerging Asian economies such as China, Mr. Burton said.