FE Fund Ratings | FE Ratings for Institutions

Our suite of FE Fund Ratings explained

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Overview

Our independent suite of ratings match the investment styles of your customers and allow you to showcase your funds in the best light. Comprising of fund ratings, manager ratings, advisers’ choices, risk scores and our FE Invest Approved Fund List we are the only group to offer all 5 ratings under one umbrella.

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Services

FE Crown Fund

Our Crown Fund Ratings are a quantitative measure and cover all the 200,000+ live share classes that FE collects worldwide. They are based on historical performance relative to an appropriate, targeted benchmark, chosen by FE.

FE Crown Fund Ratings enable investors to identify funds that are strongly outperforming their benchmark. The top 10% of funds will be awarded five FE Crowns:

Percentile

FE Crowns

90%

5

75-90%

4

50-75%

3

25-50%

2

0-25%

1

Key factors

The ratings take into account three key measurements to derive a fund’s performance

  • Alpha
  • Volatility
  • Consistently strong performance

Rebalance dates

Bi-annual

  • February
  • August

FE Passive Fund Rating

FE has created a rating exclusively for passive funds. Unlike an active fund which attempts to beat its designated benchmark, passive funds and ETFs attempt to track their index, with the aim of delivering a return as closely in line with it as possible. A different methodology is needed to rate these funds effectively.

Funds will be ranked from 1-5 crowns with no quartile weighting system. This means if all funds meet the criteria for having 5 crowns then all funds will get 5 crowns.


Key factors

The number of crowns is determined by an absolute score based on these three components:

  • Tracking difference
  • Tracking error
  • Fund size

Rebalance dates

Bi-annual

  • February
  • August

FE Invest Approved Fund List

A recommended list of funds to consider, covering all asset classes and sectors. Selected using FE’s uniquely comprehensive suite of ratings and awards, coupled with in-depth qualitative research by our skilled team of analysts; the funds on the FE Invest Approved Fund List have been scrutinised from all angles and represent the best funds, fund managers and investment houses in the industry.

Free from the traditional biases of qualitative research, FE Invest Approved Fund List contains funds from all corners of the market; from the largest household names, to focused specialists from some of today’s most exciting investment boutiques. Continuously reviewed and frequently updated, FE Invest Approved Fund List is dynamic and responsive to ensure it always signifies today’s best fund choices.

  • Insight from all angles - Looks at the best funds, fund managers, investment houses and adviser industry consensus opinion
  • Comprehensive fund selection
  • Unbiased fund recommendations
  • Peace of mind - backed up by quant ratings

Key Factors

Calculated using weighted scores based on:

  • FE Alpha Manager
  • FE Crown Fund
  • FE AFI
  • FE Group

Rebalance dates

  • March
  • September

FE Alpha Manager

FE Alpha Managers rate the performance of a fund manager over their career regardless of the number of funds they have managed or number of places worked. They are designed to distinguish fund managers who have consistently performed well over the longer term.

Only the top 10% of managers will receive this accolade.

Measured from 01/01/2000 the rating considers all fund managers running IA unit trusts and OEICs, Investment Trusts and offshore collectives for sale in the UK, with at least one fund being an IA unit trust or OEIC.

Those that have proven true, risk-adjusted alpha (stock picking skills), will be recognised- with those who have longer careers weighted more heavily.


Key factors

The robust methodology is comprised of three key components:

  • Risk-adjusted alpha (with track record length bias)
  • Consistent out-performance of a composite benchmark representing the manager’s peer group over time
  • Out/under performance and consistency in rising and falling markets

Rebalance dates


Annually

  • February

FE Risk Score

FE Risk Scores provide a single, easy to understand measurement of the relative riskiness of individual investments or even an entire portfolio.

Unique to FE and in contrast to many other risk measurements, they are:

  • Simple to use and easy to understand
  • Flexible - covering the majority of investment types in one measurement tool
  • Sensitive to market conditions
  • A barometer - measuring relative rather than absolute risk

FE Risk Scores define risk as a measure of volatility relative to the UK Leading 100 shares which has a fixed risk rating of 100. Cash has a fixed reference score of zero. Instruments more volatile than the UK Leading 100 shares have a score above 100 and vice versa, giving a reliable indication of relative risk.

Element

Risk score

Cash

0

Instruments less volatile than UK Leading 100 shares

1-99

UK Leading 100 shares

100

Instruments more volatile than UK Leading 100 shares

>100-infinity

They allow UK investors to compare a fund, an equity, an entire portfolio or even an index on a single scale - so you can see exactly where your risk exposure lies, helping in initial fund selection and in ongoing portfolio management.


Key Factors

  • Scores use a minimum of 18 months and a maximum of 3 years of weekly total returns to measure the volatility of an instrument relative to the UK Leading 100 shares.
  • All values are rebased to sterling.
  • The scores are less weighted, but not excessively so, to older returns. This means the scores are more sensitive to recent events.

Rebalance dates

  • Weekly

FE Group

FE Group Awards recognise investment management groups that possess an advantage in particular asset classes.

Groups are awarded an Outstanding or Highly Commended accolade based on the cumulative FE Crown Fund Ratings of their funds over the past three years.

In many asset classes there is an obvious front runner, followed by a chasing pack that are not in the same league as the leader but are clearly better than all other managers; these groups will be awarded a Highly Commended.

If the gap between top manager/s and the next in line is not significant, then the top manager/s are declared Outstanding. Then if a second group of managers has put a clear distance between themselves and their remaining peers they are Highly Commended. Where there are no discernible leaders in a particular field, we will not award any groups as Outstanding or Highly Commended.

Key Factors


FE Group Awards have been assigned for the following asset classes: UK equities, international developed equities, international emerging market equities, UK fixed interest, international fixed interest, commodities, property, and alternatives.

Rebalance dates

  • August

FE AFI

The Adviser Fund Index (AFI) is made up of the recommended portfolios of a panel of leading UK financial advisers.

The portfolios consist of:

  • AFI Aggressive
  • AFI Balanced
  • AFI Cautious

Based entirely on the funds actually recommended to clients, the portfolios carry real-life credibility, providing insight into the benefits of holding top quality funds.

Advisers and investors alike can look for funds recommended by this influential panel for reassurance or new ideas in fund selection.

The AFI represents recommended quality.

Rebalance dates

  • February
  • August