Fiduciary Analytics, a Sewickley, Pa.-based research company, is taking a different tack than Morningstar of Chicago in evaluating investment company fiduciary capabilities. Fiduciary Analytics' fiduciary rankings are based on quantitative measures. By contrast, Morningstar's ratings are primarily qualitative.
Fiduciary Analytics, which released its fifth quarterly report, uses 10 criteria to rate a fund's fiduciary strength in a scoring of up to 100. These include: tenure of the portfolio manager of at least two years; low risk, as measured by an Alpha and Sharpe ratio above the peer group's median; an expense ratio below the top quartile of the most expensive funds in its category; and one-, three- and five-year performance above the median of its peers. The firm will only recommend those funds that grade in the top 25%. The report is available at www.fi360.com.