Standard & Poor's expands qualitative fund research by rating new funds

Standard & Poor's Fund Services, the leading provider of qualitative fund management research and ratings, today announced it is to expand its qualitative fund management ratings by rating new fund launches.

The move enables Standard & Poor's to provide detailed analyses and opinions on funds not covered by quantitative-based data firms, which rely on ranking funds according to past performance. Linda-Jane Coffin, head of Fund Ratings Criteria at Standard & Poor's Fund Services, says, "In order to provide the investor with the best fund coverage, it is essential that fund rating agencies offer comprehensive in-depth analysis of new funds - Standard and Poor's approach and proven expertise fill this gap."

Standard & Poor's is committed to actively assisting advisers and investors in fund selection. Under UCITS III, fund promoters are extending their range of funds, and there are a rising number of 130/30 fund launches pending in the UK. Standard & Poor's expanded offering of its forward looking ratings will enable investors in heavily-marketed new funds to make more informed investment decisions on a fund , where competitor funds, which would normally serve as a benchmark, have not yet been clearly identified.

Extending Standard & Poor's fund ratings to new funds follows the success of a number of new funds that were analysed at the request of their managers. As Coffin notes, "We found that many funds that had been rated at launch subsequently maintained an S& P rating as they built a track record. Some notable examples include Findlay Park American Smaller Companies and First State Asia Pacific Leaders Fund, which proved their pedigree by continuing to perform strongly against their respective peer groups."

In order for new funds to be rated, the manager needs to demonstrate transferable skills against an appropriate benchmark, along with experience of comparable mandates.