Rating Exchange Traded Funds


Oliver Everling and Götz Kirchhoff (publisher): Exchange Traded Fund Rating: Market Overview, Criteria and Practical Application, Bank-Verlag Medien GmbH, http://www.bank-verlag-shop.de/product_info.php/products_id/3030, Cologne 2011, 375 pages, Art. 22,472-1100, ISBN 978-3-86556-257-9.

Exchange-traded funds (ETFs) present investors with particular challenges in the assessment: Product quality, index quality as well as information quality and transparency play a special role.

ETF ratings combine qualitative and quantitative methods, partly objectified in scoring models, and condensed features into panel results.

Everling and Kirchhoff are now presenting the first book on the topic, which raises the understanding of ETF benchmarks and approaches and highlights the value of ETF ratings in investment practice.

Given the abundance of information available on the Internet about ETF rating, the book provides an overview and identifies the relevant information for the evaluation of ETFs among the many sales information.

Oliver Everling und Götz Kirchhoff (Herausgeber): Exchange Traded Fund-Rating: Marktüberblick, Einsatzkriterien und Praxiseinsatz, Bank-Verlag Medien GmbH, http://www.bank-verlag-shop.de/product_info.php/products_id/3030, Köln 2011, 375 Seiten, Art.-Nr. 22.472-1100, ISBN 978-3-86556-257-9.

Fund Rating


Ann-Kristin Achleitner and Oliver Everling (publisher): Fund Rating: Quality Measurement on the Test Bench – Methods, Criteria and Benefits, Betriebswirtschaftlicher Verlag Th. Gabler, Wiesbaden 1st edition December 2003, http://www.gabler-verlag.de, hardcover, 338 pages, ISBN 3-409-15012-9.

Private and institutional investors are facing an ever-growing supply. More and more mutual funds are on offer. Against this background, the demand for the most compact and clear information on the quality of fund products is growing. For the first time, this book brings together the views of major rating agencies on the valuation of investment funds and asset managers and presents them independently. It is clear that there are still significant differences, and standards in the fund industry are evolving.

Ann-Kristin Achleitner und Oliver Everling (Herausgeber): Fondsrating: Qualitätsmessung auf dem Prüfstand – Verfahren, Kriterien und Nutzen, Betriebswirtschaftlicher Verlag Dr. Th. Gabler, Wiesbaden 1. Auflage Dezember 2003, http://www.gabler-verlag.de, gebundene Ausgabe, 338 Seiten, ISBN 3-409-15012-9.

Rating Fund of Funds

Performance, Read

An umbrella fund is a collective investment scheme that exists as a single legal entity but has several distinct sub-funds. Whether umbrella or common investment funds have performed better over a period of ten years, was the key question in a recent study. According to the study, common investment funds are on average better performers More than 150 fully convincing funds of funds were identified. More than 800 funds of the four largest, globally investing mixed fund categories were considered.

In each of the four peer groups, common investment funds achieve on average more performance than funds of funds. The biggest performance difference between umbrella and common investment funds lies in the peer group “Mixed funds globally balanced”: While the almost 100 common investment funds return an average annual return of 5.5%, the 71 funds of funds of this peer group generate on average only 4.6%, a performance difference of at least 0.9% p.a. over a period of ten years.

The lowest performance differences are shown by the funds of the peer group “Mixed Funds Global Dynamic”. Almost no difference is measurable here (individual title funds are marginally ahead). All funds average 6.6% p.a. in the past ten years.

The differences in volatility are comparatively low, since a fund of funds is a multi-manager investment, a pooled investment fund that invests in other types of funds. In other words, its portfolio contains different underlying portfolios of other funds. 

In two of the four peer groups considered, the single-title funds are even slightly ahead. This means that they have lower volatility on average. Only in the “Mixed Funds Global Conservative” peer group – which combines mixed funds with low-risk profiles – did fund of funds show a perceptibly lower volatility of 4.4% on average of 3.5% than common investment funds.

That funds of funds achieve less performance is due to the additional cost burden expected. However, despite the broader diversification, they offer hardly any appreciable volatility advantages. One explanation: common investment funds already have a broadly diversified portfolio. Even further diversification through funds brings little diversification benefits.

Nevertheless, more than 150 funds of funds create a top rating. Even though fund-of-funds concepts in the multi-asset sector have less performance in the average analysis presented here and hardly any volatility advantages, there are still numerous funds of funds that deliver convincing results.

Out of around 550 funds of funds in the four peer groups examined, 154 currently hold a top rating (equivalent to a ratio of 28%). Funds with a top rating usually outperform the respective peer group average.

It is noticeable that in three of the four comparison groups considered, the top rating quota of the funds of funds is higher than that of the individual-unit funds. This is most evident in the peer group “Mischfonds Global Dynamik”, in which 37% of the funds of funds hold a top rating. The single-title funds in this group only reach a top rating of 26%.