Products June 21, 2012

Morningstar Rolls Out Alternative Mutual Fund Ratings

Morningstar Inc. released Morningstar Analyst Ratings and Global Fund Reports for approximately 40 alternative U.S. mutual funds, representing about 75% of the alternative fund universe by assets.

 

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Analysts evaluate the funds on numeric factors as well as qualitative factors including people, process, parent, performance and price. They then rate the funds on a five-tiered scale. From highest analyst conviction level to lowest, the ratings are gold, silver, bronze, neutral and negative.

“The strategies employed in alternative funds are often new and sometimes complex,” said Nadia Papagiannis, director of Morningstar’s alternative fund research and editor of Alternative Investments Observer. “Our goal with the Analyst Ratings and Global Fund Reports is to help institutions and advisers research and compare funds as they continue to seek diversification through alternative investments.”  

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The Morningstar Analyst Rating for alternative mutual funds and the analysis are available on Morningstar.com and MorningstarAdvisor.com. The new Analyst Ratings, supporting analysis, and Global Fund Reports are also available in Morningstar Direct and in Morningstar Office.

Over the next year, the company plans to increase alternatives coverage to approximately 100 funds.

 

Products June 21, 2012

Online Tools Help Investors Assess Advisers

Investor Watchdog offers an array of free, online tools to help investors choose and monitor advisers, and replace those they feel are underperforming.

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There is a tool set for investors to use to research any adviser at any U.S. financial services firm and a tool set for terminating advisers so investors minimize their risk exposure and expense. According to Jack Waymire, the tools’ developer, the Watchdog’s Advisor Scorecard tool is popular with investors. “It arrays the professionals’ credentials, ethics and business practices side by side so it is easy to identify their relative strengths and weaknesses. Scorecard also produces an adviser rating that is generated by inputs from investors. This tool makes it easy to select the professional with the best qualifications.”  

Once an adviser is selected, investors have access to a Watchdog tool that monitors 12 categories of adviser data on a quarterly basis: performance, investment expense, risk exposure, compliance record, client attrition, regulatory actions and lawsuits. This early detection service helps investors avoid surprises and make timely decisions that reduce risk.  

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“Institutional investors, such as pension plans, make adviser-related decisions based on third-party due diligence and documentation,” Waymire said. “Individual investors make these same decisions based on undocumented sales claims. Watchdog levels the playing field by providing institutional services that have been modified for use by individual investors.”

More information is here.  

 

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