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S&P Equity Research Services Rolls Out Innovative New Approach to Mutual Fund Analysis

Posted on: Thursday, 10 September 2009, 14:20 CDT

NEW YORK, Sept. 10 /PRNewswire/ -- Standard & Poor's Equity Research Services today announced a major upgrade to its open-end mutual fund research product for financial advisors and their clients. The new research is available through S&P's MarketScope(R) Advisor (MSA) platform, a leading source for multi-asset class research, rankings and allocation strategies.

The new S&P mutual fund product incorporates bottom-up research about a fund's underlying holdings as well as performance, risk, and cost analysis to rank more than 20,000 mutual funds on a scale of 1 (lowest) to 5 (highest). The methodology goes well beyond the fund industry's traditional approach to rankings, which are based on a backward-looking assessment of risk-adjusted historical returns, and bring a broad range of proprietary tools into the analytical process including S&P STARS research, S&P Credit Ratings, S&P Fair Value and S&P Quality Ranks.

The result is greater clarity and a more robust picture of a fund's risk/reward characteristics at any given point in time. A further advantage of this approach is that it gives S&P the unique ability to immediately analyze and rank new funds, without the need for a minimum three-year performance history.

"The poor performance of many highly-rated funds during the recent market downturn highlights the limitations of backward-looking analysis and indicates to us that there is significant room for improvement in the way open-end mutual funds are analyzed and ranked," said Andrea Remyn, managing director, Standard & Poor's Equity Research Services. "We believe our new methodology provides a more dynamic and functional view of the fund marketplace, giving advisors the tools they need to make an informed decision about how a fund fits with the investment objectives of their clients."

S&P ranks mutual funds by decile within their S&P Asset Category and provides detailed peer comparisons throughout the fund reports. A fund's ranking and pricing data are refreshed every week, reflecting its performance for the period as well as changes to S&P's assessment of individual components as of the close of trading on the prior Friday.

All reports on equity, fixed income and blended mutual funds available through this new product will also include commentary from S&P on the fund's ranking, performance, and holdings, enabling advisors to understand more about the fund investment approach.

"We believe that past performance should be the beginning of the search for a mutual fund - and not the end," said Todd Rosenbluth, Director at Standard & Poor's Equity Research Services. "By conducting proprietary holdings-based analysis and factoring in various performance, risk and cost components, the Standard & Poor's Mutual Fund Rankings provides insight into how a fund is positioned, rather than solely looking at the past."

The new open-end mutual fund product represents a further expansion of the research available through the multi-asset class MSA platform. Advisors now have easy access to S&P data and analysis on a broad range of asset classes including equities, exchange-traded funds, bonds, variable annuities and options in addition to mutual funds. Complementing the research is a suite of analytical tools including:

• HoldingScan, which provides a detailed look at a portfolio's asset types and analyzes them to the holding level to show exposure to various asset classes, regions, sectors and individual holdings;
• Hypothetical Tool which provides the ability to create illustrations of portfolios tailored to client needs that reflect the effect of tax rates, fees, expenses, customer contributions and withdrawals;
• Alerts and Watchlists that provide the ability to stay abreast of specific securities and market activity;
• Bond Laddering Tools that allow advisors to compare and contrast different offerings in the fixed income space, create portfolios and access independent intra-day market commentary and news.
  

About Standard & Poor's Equity Research Services

As the one of the world's largest producers of independent equity research, Standard & Poor's licenses its research to over 1,000 institutions for their investors and advisors, including 19 of the top 20 securities firms, 13 of the top 20 banks, and 11 of the top 20 life insurance companies. Standard & Poor's team of over 100 experienced U.S., European and Asian equity analysts use a fundamental, bottom-up and macro-economic approach to assess a global universe of approximately 2,000 equities across more than 150 sub-industries worldwide. Follow Standard & Poor's equity analysts' U.S. market commentary each day at http://www.equityresearch.standardandpoors.com/.

Analytic services and products provided by Standard & Poor's are the result of separate activities designed to preserve the independence and objectivity of each analytic process. Standard & Poor's has established policies and procedures to maintain the confidentiality of non-public information received during each analytic process. Standard & Poor's does not trade for its own account. The analytical and ethical conduct of Standard & Poor's equity analysts is governed by the firm's Research Objectivity Policy, a copy of which may also be found at www.standardandpoors.com. Standard & Poor's and its affiliates provide a wide range of services to, or relating to, many organizations, including issuers of securities, investment advisers, broker-dealers, investment banks, other financial institutions and financial intermediaries, and accordingly may receive fees or other economic benefits from those organizations whose securities or services they may recommend, rate, include in model portfolios, evaluate or otherwise address.

About Standard & Poor's

Standard & Poor's, a subsidiary of The McGraw-Hill Companies (NYSE: MHP), is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research and data. With offices in 23 countries and markets, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 150 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com.

SOURCE Standard & Poor's

Source: PR Newswire

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