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By Darius McDermott


FundCalibre – Independent fund research for every investor

FundCalibre was launched in 2014 and, unlike all other fund rating agencies, it was designed for the man or woman on the street. As I like to say every time we do a fund manager interview or write an article: my mum needs to understand what we are talking about. 

It’s not that my mum isn’t intelligent – she is. But the investment world is full of jargon and it needs explaining in plain English. 

Our ratings are also easy to understand. We did not see the point in having one to five stars or bronze, silver or gold. Why would you invest in a less superior product if you were given the choice? So with us, a fund is either Elite or it isn’t.

There are also thousands of funds from which to choose. Because we are so picky and only rate funds we consider to be Elite, it means our list of best of breed funds is much shorter than many of our peers. Indeed, we only rate a maximum of 10% of the funds available in each sector, and often less. 

Investment research anyone can trust

Another differentiating factor is that FundCalibre is truly independent – there is no “pay to play”. So investors can read, watch or listen to our research, safe in the knowledge that we have rated a fund on its own merits, not because we have been asked – or paid – to do so. 

Our process is robust and pure. At the very first part of our process, we use a filter: we measure the past performance of all funds and then strip out the market movement so that we can see what a fund manager has actually added in value.

Say, for example, the UK stock market has risen by 6% over the past three years and a fund has risen by 10% when the market is taken out of the equation, it leaves a 4% difference.  We then look to see if the manager was lucky or skillful. One way of distinguishing this is to look at the consistency of performance: did the manager add all that 4% in one year, or was it more like an extra 1% or so in each of those three years?

We then use some clever maths to work out the probability of that manager adding value over the next 12 months. 

It’s only if a fund passes this filter that we will even contemplate meeting the fund manager to do, further assessment. 

At this second stage, we like to meet fund managers, look them in the eye, and grill them about their investment process. We’ve been doing this kind of qualitative research for more than 20 years and, over the two decades, have got quite skilled at working out who is talking sense and who is blagging it. 

If we leave this meeting convinced the fund and manager are good, we then put it forward to our investment committee to debate whether or not it is just good – or Elite. 

The final stage is the award of our Elite Rating. If a fund gets rated, we approach the company that runs the fund to ask them if they want to license it. It’s at this point we may – or may not – get paid. 

By licensing an Elite Rated fund, the company gets to use our logo on their marketing material and website, and they will have the opportunity to record a video interview and podcast with us. We’ll also talk about the funds in our weekly and monthly blogs

However – and this is the important bit that underlines our integrity – if they don’t choose to license a fund, it is still rated and available to view on our website. 

At the time of writing (August 2019), 20% of the 182 funds rated by FundCalibre, are not licensed. We think this number demonstrates very effectively that we are not doing this to get rich – we are doing it so that investors have access to free, independent, quality fund research that will help them make better investment decisions. 

Investment research anyone can use

While we set out with everyday investors in mind, and still have their needs at the core of everything we do, FundCalibre is also attracting the attention of financial advisers. 

Again, unlike some of our peers, we do not charge people to have access to our fund research, so more and more advisers are also using it for their own and their clients’ investment choices. 

Schroders – a fund management company – surveyed 400 UK advisers in November 2018. Their results showed that 75% of these advisers used fund ratings as part of their fund selection process. 40% of those advisers now use FundCalibre, and it is the fastest-growing rating agency over the past three years in terms of these advisers’ use. 

And it’s not just fund selectors in the UK that are using our independent fund research: as one of our Elite Rated fund companies pointed out: “It is clear that FundCalibre reaches investors all over the world. We recently received an inquiry about one of our Elite Rated funds from a major Japanese fund distributor, who found out about it from FundCalibre.” 

From a standing start in August 2014, five years later in August 2019, we have had 477,000 unique visitors who have viewed 2 million pages between them. And our social media has grown exponentially, with our Youtube channel attracting 1,250 subscribers, with an average of 3,850 views per video and over 7,000 minutes watched every month. That’s a lot of investors, looking at a lot of our research.

Here is Fund Calibre’s view for 2019 and the year ahead!

The views of the author and any people quoted are their own and do not constitute financial advice. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Before you make any investment decision make sure you’re comfortable and fully understand the risks. If you invest in fund or trust make sure you know what specific risks they’re exposed to. Past performance is not a reliable guide to future returns. Remember all investments can fall in value as well as rise, so you could make a loss.
The author was not remunerated but may hold a financial interest in one or more instrument