Investments  

Distribution Technology unveils fund rating service

Distribution Technology unveils fund rating service

Distribution Technology has launched a fund rating system, with scores based on each portfolio’s tracking error, frequency of outperformance, volatility and general performance history.

The Asset Consistency and Efficiency (Ace) fund classification scheme, aimed at advisers using the asset and risk model of the firm’s Dynamic Planner tool, considers both how a fund fits the underlying assumptions of this model and how it performs in its own right.

Consistency attributes rank a vehicle’s frequency of outperformance and tracking error, while the separate Efficiency metric examines volatility and performance history.

Article continues after advert

The attributes are measured over discrete three and five-year time periods. Each of the two categories is equally weighted and the latest data is reviewed each quarter.

Ratings range between four, the highest score, and one.

Chris Fleming, director of asset and risk modelling for Distribution Technology, said: “We are constantly looking to enhance the service provided by Dynamic Planner so that it best meets the demands of our clients.

“Combining an assessment of fund quality with the proven Dynamic Planner client and fund risk profiling capabilities was a natural progression for us.”

Mr Fleming said around 250 funds from a universe of 2,000 have been awarded a rating.

Columbia Threadneedle top both the single asset and multi-asset fund rankings in terms of the number of products rated, with 12 in the former and six in the latter rankings.