Fund Expert.co.uk??

guileyrulez

Hi,

How is everybody experience on the website fundexpert.co.uk?

It has just informed me that the funds I am thinking of investing in are 2-3 "stars"- but was wondering what other investors opinion was on these ratings?

Thanks,

talexuser

Some of their ratings seem out of kilter to me, but that is my opinion.

Don't trust one site.

Look at as many as you can, chart your selections yourself, try and see the difference between marketing recommendations (where the site may be getting payments or just touting for business) and the real performance stars.

And remember that this years top of table may very well not be next years, and be prepared to see losses and have the patience to see gains.

Rollinghome

I'd normally suggest that one person's guess is as good as anyone's but their views and selections often seem bizarre. Can't help thinking they're using a bent pin or just having a laugh.

You'd probably be better sticking to www.trustnet.co.uk or www.morningstar. Of the discount brokers, who may have a vested interest in certain funds, www.bestinvest.co.uk seems to be one of more reasoned but do your own research and don't place too much reliance on any of them.

Shaolin_Monkey

I'd ignore it personally. It doesn't really explain how the rating works (what timescale and so on) and I'm not convinced "momentum investing" has much relevance to long term fund choices.

I'm guessing it rates funds by relative strength over a fairly short period. Defensive funds will likely show better relative strength in a weak market, and more aggressive funds that happen to be in the right sectors will show relative out-performance when the market is surging higher. If it does work like this, your 5 star fund will easily become a 1 star based on what the market is doing. I'd rather look at how they've performed across different market conditions and just accept that no one fund will ever out-perform all of the time.

Jegersmart

I checked my recently taken position in Investec Global Gold on Fundexpert and the fund receives 1 star rating it as very poor. I looked at your recommended alternatives which included 2 funds promoting Financials, and another promoting Baring ASEAN Frontiers. I presume that the complete lack of relevancy is due to the fund classification (in Specialist sector)?

J

Jegersmart

FundExpert.co.uk wrote: »

Hi Jegersmart

You are spot on. The Specialist sector is a rich hunting ground for momentum investing but the IMA sector classification means that the Specialist sector remains a mixed bag of funds. As such the sector contains a vast array of funds that vary considerably in their levels of risk.

You must bear this in mind if you hold a fund in the specialist sector and are looking for alternatives, which is why we have an onscreen Warning highlighting this.

FundExpert.co.uk Research Team.

Thanks for the clarification, we will see how a 1 star rated fund works out I guess

J

cepheus

I posted this a short time ago on another thread, this suggests the best funds do indeed possess momentum for short periods.

Mutual Fund Performance: Measurement and Evidence†

1. Keith Cuthbertson,
2. Dirk Nitzsche,
3. Niall O'Sullivan

Article first published online: 16 APR 2010

The paper provides a critical review of empirical findings on the performance of mutual funds, mainly for the US and UK. Ex-post, there are around 0-5% of top performing UK and US equity mutual funds with truly positive-alpha performance (after fees) and around 20% of funds that have truly poor alpha performance, with about 75% of active funds which are effectively zero-alpha funds. Key drivers of relative performance are, load fees, expenses and turnover. There is little evidence of successful market timing. Evidence suggests past winner funds persist, when rebalancing is frequent (i.e., less than one year) and when using sophisticated sorting rules (e.g., Bayesian approaches) -but transactions costs (load and advisory fees) imply that economic gains to investors from winner funds may be marginal. The US evidence clearly supports the view that past loser funds remain losers. Broadly speaking results for bond mutual funds are similar to those for equity funds. Sensible advice for most investors would be to hold low cost index funds and avoid holding past ‘active’ loser funds. Only sophisticated investors should pursue an active ex-ante investment strategy of trying to pick winners - and then with much caution.

http://onlinelibrary.wiley.com/doi/1...nticated=false