S&P equity research introduced its fund methodology in September 2009, taking a bottoms-up approach to a fund’s underlying stock, bond and other holdings, as well as performance, risk and cost factors. S&P also looks at credit ratings, fair value and quality rankings.
The database ranks 19,000 funds on a scale of one, the lowest score, to five, the highest. The key to the approach is going beyond past performance.
“By moving beyond traditional performance-based research to include factors such as quality of holdings, manager tenure, risk, relative cost and more, we believe we are able to provide new insight into mutual fund dynamics,” said Stephen Biggar, managing director, global equity research at S&P.
S&P will announce the finalists in early October and the winners in November.
