S&P Capital IQ unveils new grading system for passive strategies
Passive funds will be treated as a separate asset class under a new grading system introduced by S&P Capital IQ Fund Research.
Passive exchange-traded funds (ETFs) and index tracker funds will be assigned a platinum, gold or silver rating under the new methodology while actively-managed ETFs will remain subject to the previous system.
Kate Hollis, Director, Fund Research, S&P Capital IQ: “We are seeing a massive upsurge of interest in passive funds. Low cost beta propositions, with low or no management fees are becoming a reality.
“In the run-up to UK retail distribution review (RDR), established players and new providers alike have introduced plain vanilla low-cost tracker funds reinforcing extreme competitive pressures.
She adds: “We believe the best way to determine which passive funds can achieve a grading - that is to say, which funds have achieved their objectives in the past and are likely to achieve them in future - is by combining the quantifiable, such as the costs and historic track record, with the qualitative or the way in which performance has been achieved and the people and processes involved.”
Have you looked at investment trusts more since RDR?