FundCalibre is an exciting new fund ratings service, designed to help investors find the most skilful managers and the best investment funds. The service has been established as a joint venture, which combines the quantitative skills of Albemarle Street Partners (an investment consultancy firm managed by an experienced team of former multi-managers) and Chelsea's industry-renowned research, which has led to the Chelsea Core Selection outperforming its benchmark by 45% over a 10-year period and has added significant value for our clients.
Other ratings agencies have all sorts of different ratings, including stars, badges, gold, diamond, platinum etc. Frankly we think the current ratings only serve to confuse everyone. Is a two star fund good or bad? Is a bronze fund any good? FundCalibre’s Elite Rating is simple and unique. We believe that either a fund manager has the ability to add real value over time for their investors and should qualify for an Elite Rating or they don't.
To qualify for an Elite Rating a fund must pass FundCalibre’s rigorous research process. It starts with AlphaQuest, a unique quantitative screening tool, which was developed by Albemarle, and forms the first part of the FundCalibre ratings process. It strips out market movements and then analyses the volatility of the fund manager's skill – basically to see if it is indeed skill or just luck.
To qualify for an Elite Rating a fund manager must have been running the same mandate for at least three years. Only those managers who display consistent skill over a minimum of three years, and have more than a 60% probability of generating alpha (performance over and above the benchmark return) over the next 12 months, make it to the next stage of the process.
This is where FundCalibre’s Elite Rated funds can differ from the Chelsea Selection. There will be a very high overlap of funds, which are both Elite Rated and on the Chelsea Selection, but at Chelsea we are happy to highlight new funds or managers if we believe their credentials to be worthy. So there will be instances where the fund manager has not been in place for three years, but the Chelsea team feels strongly that the fund will outperform its peers. FundCalibre has also only just launched and there will be other funds which will qualify for an Elite Rating in the future.
Once a fund has passed AlphaQuest, a meeting with the fund manager will then take place to undertake a qualitative assessment. A fund will never qualify for an Elite Rating without a face-to-face meeting.
The analysts who have had the meeting will then present their findings to the fund selection committee. Only the funds deemed by all to be the very best will be awarded an Elite Fund Rating.
On the FundCalibre website you will find easy-to-understand fund notes on many of the Elite Rated funds, including FundCalibre's opinion, which you can use to validate or narrow down your investment choices.
You can also build, save and track your own model portfolios of Elite Rated funds. You can analyse how the addition of funds will impact on your overall asset allocation. You can also examine your portfolio’s performance. If you want to learn more about investments you can visit the knowledge centre, which contains free information guides as well as articles and fund manager interviews.