The Markets

Lipper Makes Changes to Fund Rating System

Lipper, Inc. announced changes to its global Lipper Leader rating system that it says will create a more flexible and marketing friendly set of icons that better suit the marketing needs of fund companies.
Reported by Alison Cooke

The redesign will incorporate two new visual designs for Lipper Leader iconography – number icons and check icons, announced the mutual fund research firm and subsidiary of Reuters.

One change will be to the numerical rating system; beginning in November, 1 will be used to represent the lowest-scored funds (bottom 20%) and 5 will represent the highest-scored funds (top 20%).

The scores are both quantitative and historical based on a transparent mathematical framework, Lipper said. The firm also said the underlying methodology and matrix configuration of the rating system that evaluates whether funds suit individual investment styles and goals, such as consistent return or capital preservation, will remain unchanged.

The changes will take effect in November 2007. Lipper Leaders are updated monthly.

More information about the rating system and other Lipper products, as well as a usage guide for the new iconography, is available at http://www.lipperweb.com.