S&P Fund Services says it rates multi-manager funds by putting them through the same process that multi-managers use for their underlying managers.
The fund research company recently awarded new A ratings to three Fidelity multi-manager funds, multi-asset navigator, multi-asset strategic defensive and multi-asset strategic.
Ratings for the multi-asset navigator fund and multi-asset strategic funds were awar-ded on the basis of consistently strong relative returns driven by asset allocation and the stock selection by the underlying managers.
Confidence in fund manager Trevor Greetham’s track record was enough to produce another A rating for the multi-asset strategic defensive fund despite a slow start.
Consistency in performance is key for S&P Fund Services when rating funds and it is not interested in funds that top their sector one month but prop the sector up the following month.
S&P Fund Services global head of equities Guy Boden says: “We ask multi-managers who they have bought and why. We ask them about access to managers, information and what they are doing with this information.
“The asset allocation process also needs to be right, so we will look at why a multi-manager prefers Asia over the US, for example.”