FE is proud to annouce the launch of its Crown Fund Ratings and Risk Scores in Australia, in partnership with Money Management. These purely quantitative fund ratings make it easy for financial advisers to identify funds with strong and consistent performance and an appropriate risk level over the previous three years.
The ratings will shortly be available in both FE's research and analysis tool FE Analytics and also the FE Investment Centre on Money Management.
The FE Crown Fund Ratings are a quantitative measure covering the 200,000+ live funds that FE collects worldwide. The ratings help to distinguish between funds that are strongly outperforming their benchmark and those that are not. Rebalanced twice a year, the rating takes into account three key measurements to derive a fund’s performance: alpha, volatility and consistently strong performance. The top 10% of the funds are awarded five crowns, the next 15% receive four crown and each one of the next three quartiles are given one less crown.
The FE Risk Scores were created to provide a single, easy to understand measurement of the relative riskiness of individual investments or even an entire portfolio. In contrast to many other risk measurements they are sensitive to market conditions and are robust barometer that measures relative rather than absolute risk. The Risk Scores are also immensely flexible - covering the majority of investment types in one measurement tool.
FE Risk Scores for funds & sectors: FE Risk Scores define risk as a measure of volatility relative to the ASX 200 which has a fixed risk rating of 100. Cash has a fixed reference score of zero. Instruments more volatile than the ASX 200 have a score above 100 and vice versa, giving a reliable indication of relative risk.