For more stories like this, sign up for the PLANADVISERdash daily newsletter.
Products April 4, 2014
fi360 Backs Fiduciary Scoring with Data
An independent study from financial research firm MacroRisk Analytics suggests the fi360 Fiduciary Score, a proprietary mutual fund rating system, has a strong correlation to investment performance.
Reported by PLANADVISER staff
The fi360 system provides training programs, designations and software to help investment advisers grow and protect client assets through better investment and business decisionmaking. The firm says its fi360 Fiduciary Score methodology for investment due diligence has been found to contain statistically significant content for the mutual fund portfolio construction process, according to a recent MacroRisk Analytics study.
The fi360 Fiduciary Score is an investment rating system that examines open-ended mutual funds, exchange-traded funds (ETFs), and group retirement annuities to see whether they meet a minimum fiduciary standard of care. The scores, which range from zero to 100 (with zero being the most preferred mark), are calculated on a monthly basis for investments with at least three years of trading history.
The MacroRisk study uses data from December 31, 2000, through March 31, 2013, to observe the relationship between various scores given in advance to mutual funds and the outcomes those funds actually achieved. Researchers conclude that investments scoring in the top quartile of the one-year fi360 Fiduciary Score Average, identified as the “Green” category, demonstrated higher median returns than funds receiving worse scores when looking at one-year, three-year, and five-year future annualized returns.
Blaine Aikin, CEO of fi360, says his firm is vindicated, if not surprised, by the results of the MacroRisk Analytics study, adding that the fi360 Fiduciary Score tool helps advisers perform due diligence obligations by using an objective, repeatable process for evaluating investments.
“Knowledge is power, especially when it comes to portfolio construction, and the score is just one tool informed investors and advisers can use,” Aikin says.
The fi360 Fiduciary Score is available through the fi360 Toolkit or through a data license with the firm. Investment advisers can request a free 30-day trial of the fi360 Toolkit at www.fi360.com/freeToolkit.
A copy of the MacroRisk Analytics evaluation of the fi360 Fiduciary Score is available at www.fi360.com/GreenisGood.