In response to client feedback on the most suitable share class to use in the post-RDR investment landscape, FE have made the decision to use clean shares as their primary representative for all FE Crown ratings.
Sam Walker, data director at FE, says: “The historical premise for basing the rating on the highest charging share class, which has been in line with industry best practice and also the trade body – was to assure that all investors were getting a fair deal, and to ensure that all funds were being measured on the worst experience of any investor.
"Of course the limitation of this approach is that it fails to support investors looking to make new investments in clean share classes; we risk misleading people who want to conduct a like-for-like comparison on funds during their evaluation processes.”
Mr Walker continues: “We do need to stress however that these newly based ratings are calculated on the returns generated by clean share classes, and are not representative of any legacy deals retail investors may have.” FE urges investors to assess all costs involved in investing in a particular fund, including platform and trading costs, to ensure that they are getting the best package on offer.
Once the changes have been implemented on the 18th January 2016, FE Trustnet and FE Analytics users can be confident that FE Crown ratings will continue to provide the fairest and most accessible benchmark for comparing fund performance.
Furthermore, when used in conjunction with other FE ratings (FE Alpha Manager, FE Invest Approved Funds and FE Risk Scores) they provide the most comprehensive quantitative evaluation of investment products available on the market; allowing investors to independently evaluate a fund from all angles.
FE ratings are viewed more than 50,000 times per month as part of investment considerations, with a total of 1m views per month overall, on FE’s free fund data service through FE Trustnet.