A service dubbed “Morningstar meets TripAdvisor” is to launch in a bid to shake-up the fund ratings universe.
SharingAlpha, in its “final stage of development” according to co-founder Oren Kaplan, aims to bring a new twist to fund rankings by allowing users to rate, and comment on, funds.
These individuals will then build up their own “track record” of fund selection based on the ratings they have given. Mr Kaplan said the ‘wisdom of crowds’ philosophy could bring improvements to the current model of fund ratings.
“Funds are currently rated by agencies using methodology based on past performance. Even the agencies admit it’s not working,” Mr Kaplan said.
“We believe using the power of internet, and views of fund selectors and advisers, is a better way to do this.
“The incentive for raters is for them to gain a track record. Anyone can use it, so the raters could be advisers, wealth managers or even an MBA candidate looking for a way into the industry.”
The service, which Mr Kaplan expects to be predominantly used by people already working in the asset management industry, does mirror existing ratings services in one aspect: its revenue model.
The SharingAlpha site, which can be found at www.sharingalpha.com, is free to use, but will seek licensing fees from fund managers who wish to use its ratings on their marketing material.
Ratings will be given based on users’ asssessments of a fund’s performance, the managers involved in running it, and its cost.
Those users giving ratings will also be able to assemble a theoretical portfolio of funds using the site, allowing them to demonstrate their fundpicking skills.