FUNDS DATABASE
Chapter Summary: Our proprietary rating system for investment funds listed on European and US stock markets
Fund Rating System
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Investors RouteMap provides its Best Guess for the prospects of equity
funds listed in EuroNext, Frankfurt, London and New York. These are regularly updated as
at month-end prices. Recommendations are made for each fund, not only in terms of absolute
performance but also relative to an appropriate benchmark. Country funds are analysed in
the Shares RouteMap and sector funds are analysed
in the Styles RouteMap. These are: -
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Funds in Research Universe
(Click on link in table below for each dataset)
| Country | Sector | Bonds |
Forex |
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| Index | Managed | Index | Managed | Index | Index | Total | |
| EuroNext | 51 | 1 | 27 | 1 | 4 | 0 | 84 |
| Frankfurt | 30 | 8 | 34 | 8 | 6 | 0 | 86 |
| London | 14 | 90 | 9 | 83 | 3 | 0 | 199 |
| New York | 51 | 48 | 135 | 33 | 5 | 7 | 279 |
| Total | 146 | 147 | 205 | 125 | 18 | 7 | 648 |
Regional Considerations
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In Continental Europe index funds are the way to go, because there is little tradition of investment companies, apart from the Netherlands, home to Robeco and Rolinco, Europe's largest investment companies. In practical terms there is little difference, because Continental managed funds generally have redemption facilities. Liquidity can be problematic for all but the broadest European mandates and domestic country funds in their home markets. |
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Britain has the most liquid market for global managed funds, a.k.a. investment trusts, so index funds have been relatively slow to catch on, and are often less liquid than comparable investment trusts. There are many specialist trusts and a majority have broader mandates covering whole regions or investment styles, while only a minority cover individual countries or sectors. Many funds have a bias towards UK quoted companies, for tax reasons. Capital gearing is a speciality of many UK funds. |
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As the largest market in the world, the US is also the leader for index, covering a long list of individual countries and the full range of domestic sectors. Managed funds, a.k.a. closed-end funds, are typically more specialised than their UK counterparts. Most are reasonably liquid, so investors have the luxury of choosing between the two types for most mandates. Under US laws, funds are obliged to pay out not just dividends but also realised capital gains. However these are minimal for index funds, because of low portfolio turnover. |
Glossary of Terms
| Stock Code | The unique identifier for every security on each stock market. This is the stock code on EuroNext, WKN in Germany, EPIC in London and ticker ticker symbol in the US. |
| Fund Name | This is the short form, excluding the manager's name, which is shown ina separate column as Fund Sponsor. Funds are listed alphabetically by this data type. |
| Investment Mandate | The Investors RouteMap category, or combination of categories, on which recommendations are based. These are researched in the Shares and Styles RouteMaps. |
| Best Proxy | The preferred option, based on liquidity, quotation in local currency, capital gearing and closest fit between with the fund's mandate and the Investors RouteMap category. |
| Liquidity Rating | Unrated funds are often illiquid. Dealing spreads may be wide for one star funds but should be modest for two star funds. Three star funds are suitable for large positions. |
| Correlation with World | The closer to unity, the more likely the investment mandate will perform in line with the PIT Global Stock Markets index. Correlation is based on monthly changes over two decades. |
| Volatility (Std. Dev.) | Standard deviation of monthly changes in common currency prices for the mandate. These are average figures over two decades, but fluctuate significantly with market conditions. |
| Fund Sponsor | The brand name of the financial institution responsible for issuing a family of index funds, or the investment management firm for managed funds. |
| Capital Gearing | This shows whether the fund has borrowed money against the security of its portfolio. data is available only for UK investment trusts. |
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