Highlights of Fundata FundGrade rating system
Modern Portfolio Theory is used to calculate and assign the Fundata FundGrade. A
fund’s performance is evaluated using three ratios that measure the following:
- 1) Excess return over a risk free
rate per unit of total risk (Sharpe Ratio).
- 2) Excess return over a minimum
acceptable return per unit of downside risk (Sortino Ratio).
- 3) Excess return over a benchmark
per unit of active risk (Information Ratio).
All three measures are independently calculated and weighted equally to create the
The Fundata FundGrade rating system uses the fund classification standards that
are defined by the Canadian Investment Funds Standards Committee (CIFSC) to ensure
comparability between the investment funds.
Each component’s score is measured individually. In order to receive a high overall
score, a fund must be able to demonstrate strength in all three ratios within the
same measurement period. Each of the three elements is equally important in the
scoring system, with the ratios being calculated for 2-, 4-, 6-, and 8-year periods.
More emphasis is placed on recent performance to enhance the comparability between
funds with varying performance start dates. Funds must have at least 24 months of
performance history to be included in the calculation.
Scores are calculated only for the retail series of each fund. Institutional and
F Series are not included. When there is more than one retail series, the lowest-scoring
series is used to calculate the grade. Once a FundGrade is calculated for a fund,
it is then applied to all related series of the fund.
In addition, separate grading calculations are made for mutual funds and segregated
funds. Pooled funds and hedge funds are not included in the calculations.
The FundGrade A+ Rating takes the FundGrade ratings to a whole new level. The FundGrade
A+ Rating identifies funds with not only the best risk-adjusted returns but also
those demonstrating the highest level of consistency. Very simply, the Fundata A+
Rating is awarded annually to funds that achieve consistently high FundGrade scores
through an entire calendar year.
The FundGrade A+ Rating is a totally objective, transparent, score-based calculation
using a grade-point average that ranks funds to determine the annual “best-of-the-best”
ratings. As such, the FundGrade A+ Rating provides investors, advisors, and fund
managers with a single, reliable, easy-to-understand fund-performance rating based
on an entire calendar year.
to see the current list of FundGrade A+ funds.