Standard & Poor's today announced that it has upgraded its open-end mutual fund research product for financial advisers and their clients.
Standard & Poor’s today announced that it has upgraded its open-end mutual fund research product for financial advisers and their clients.
The new research — available through S&P’s MarketScope Advisor platform – is the latest attempt by S&P to reach out to advisers.
The firm, a unit of The McGraw-Hill Cos. Inc., began making ETF reports available to advisers this year.
Similar to its ETF reports, the new S&P fund product incorporates bottom-up research about a fund’s underlying holdings — as well as performance, risk and cost analysis — to rank more than 20,000 mutual funds on a scale of 1 (lowest) to 5 (highest).
The result is greater clarity and a more robust picture of a fund’s risk/reward characteristics, Standard & Poor’s said in a statement.
The enhancment also gives S&P the ability to analyze and rank new funds immediately without the need for a minimum three-year performance history, the company noted.
“The poor performance of many highly rated funds during the recent market downturn highlights the limitations of backward-looking analysis and indicates to us that there is significant room for improvement in the way open-end mutual funds are analyzed and ranked,” Andrea Remyn, a managing director with Standard & Poor’s equity research unit, said in a statement.
S&P ranks mutual funds by decile within an identified asset category and provides detailed peer comparisons throughout the fund reports.
A fund’s ranking and pricing data are refreshed every week, as well as changes to S&P’s assessment of individual components as of the close of trading on the prior Friday.
All reports on equity, fixed-income and blended mutual funds available through the new product will also include commentary from S&P on the fund’s ranking, performance and holdings.
“We believe that past performance should be the beginning of the search for a mutual fund, and not the end,” Todd Rosenbluth, a director at the equity research unit, said in a statement.
“By conducting proprietary-holdings-based analysis and factoring in various performance, risk and cost components, the Standard & Poor’s Mutual Fund Rankings provides insight into how a fund is positioned, rather than solely looking at the past.”
