New fund manager receives old ranking

New fund manager receives old ranking

Current fund ranking methodology has plenty of problems which SharingAlpha wishes to solve.

past performance

Here are just a few examples:

  • The past performance achieved by a certain Fund Manager is still taken into account after the Fund Manager has been replaced with a new one.

  • A fund that invests in a market that is less liquid most likely will have a hard time achieving the same results once the fund grew in size. Most fund managers tend to declare a soft or even hard close of the fund in cases where they fear that the fund has reached its capacity, however, in more cases than none, its way to late.

  • Leading the peer group in terms of past performance might be a result of an investment strategy that significantly deviated from the strategy taken by the rest of the peers. For instance, if a fund manager decides to hedge part of the currency exposure, the end result might be very positive, however it might not be as a result of pure stock or bond selection.

The factors above, and many others, can only be taken into account once a proper qualitative analysis is preformed. Conducting such a deep and ongoing analysis can only be done by utilizing a large group of people.

Also, checking that what is written on the fact sheet fits the investment strategy the fund manager has taken in the past, or simply verifying that the same fund manager is currently holding the steering wheel and is not involved in managing other funds or staff that are not related to the fund, are tasks that can not be achieved properly by using quantitative tools.

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