About Fund Ratings

We rate each fund which we research, and provide this rating to clients through a subscription service. We offer three Rating levels:

Tier 1 Rating:

This is our top rating. We are satisfied that this offering is managed according to a well-considered process, applied consistently and supported by the business.

Tier 2 Rating:

This is a good fund, however we have some minor concerns which may be people, process or business related.

Tier 3 Rating:

This is a negative rating. We have one or more fundamental concerns about aspects of this fund and believe there are better alternatives.

Our research process focusses on all elements which drive long term investment success. In this we include the business structure within which the fund operates, the fund management team, their beliefs and principles they follow in making decisions, team dynamics and culture, as well as evidence of investment process being followed consistently. This approach offers the highest degree of comfort that the fund is being managed appropriately.

Clients use our ratings as an independent guide to make informed investment decisions.

How we select funds to rate

We aim to rate funds which are in the best interest of our clients. This includes:
  • Funds which are widely held in existing portfolios
  • Client requested funds
  • New funds coming to market where there is client interest
  • Funds which are offered on investment platforms (LISPS)
  • Funds we identify based on various factors
We aim to cover a wide range of funds to ensure that clients have sufficient breadth of choice when using our ratings to inform their decisions.

Currently we cover:

  • South African and Offshore domiciled funds
  • Single asset class and Multi-asset class funds
  • Active and Passive funds
  • Funds from large institutions as well as smaller boutiques
We conduct an ongoing market assessment to see if there are funds which we need to cover. When identified, we approach the fund manager in question and the due diligence process begins. The full rating process can take up to 4 months per fund.

What we evaluate

Rating Process

We cover each fund comprehensively by following these steps:

Information Gathering

For each fund we gather supporting information and evidence to be able to evaluate the management of the fund. This includes due diligence questionnaires as well as our own research. We also perform analytical studies on each fund using independent tools, and we evaluate the fund managers own analysis.

Fund Manager Visit

We use this time to test that the day to day management of the fund is in line with what is expected and documented. We try to avoid marketing presentations wherever possible, and prefer to drive these sessions through informed questioning. We try to establish if a fund is credibly managed, how the team works as a unit and various other elements which provide context.

Rating Meeting

Each team member arrives at an independent assessment of the fund. We then debate the rating elements until we have clarity on which Tier Rating should be allocated. Each rating is driven by a single member to ensure our conviction levels are reflected in the rating.
Fund Management Companies covered: