Standard & Poor’s Fund Services, a provider of qualitative fund management ratings, has launched the latest edition of its Funds of Hedge Funds Directory, a bi-annual review of the sec
Standard & Poor’s Fund Services, a provider of qualitative fund management ratings, has launched the latest edition of its Funds of Hedge Funds Directory, a bi-annual review of the sector.
To date, S&P Fund Services has covered nearly 100 funds, with the latest issue of the directory including more than 50 that currently have a rating. S&P Fund Services has been rating funds of hedge funds since 2003, and mutual funds for the past 17 years.
Guy Boden, head of research at S&P Fund Services, says: ‘In these turbulent market conditions, qualitative information on funds of hedge funds is becoming increasingly important.
‘Demand for greater transparency from advisors and institutional investors has led to rising demand for fund management ratings within the fund of hedge funds sector across Europe, and increasingly in the US. Moving forward we are focusing our attention on making our research more easily available to institutional investors such as pensions and endowments.’
Standard & Poor’s Fund Services provides fund management ratings on over 2,200 funds worldwide based on analysis of the stability of a fund’s parent group, the appropriateness of its investment policy, and the sustainability of its performance.
Funds rated in the AAA to A categories demonstrate an ability to provide above-average returns over a long-term period relative to funds in the same sector, along with a strong ability to adhere to a consistent investment process.
The differentiation in the rating categories is based on the consistency of a fund’s performance relative to its own objectives along with Standard & Poor’s assessment of the investment process and management.
The rating is based on an evaluation of qualitative (management, investment process, and organisation) and quantitative (historic performance, portfolio construction, and volatility) factors that contribute to long-term performance.
Standard & Poor’s, a division of the McGraw-Hill Companies, is an international provider of financial market intelligence, including independent credit ratings, indices, risk evaluation, investment research and data, with some 8,500 employees, including wholly-owned subsidiaries, in 21 countries.