FundScore

, Your FundScore Report

Contents:

  1. The difference between good and bad funds
  2. Are your funds good enough?
  3. Action to ensure you only invest in the best funds

1. The difference between good and bad funds

It is huge, and if you get this right it will transform not just your investing, but possibly your life.

The problem is that 94% of funds are mediocre at best1.  You, or your adviser, need to identify the small number of winning funds, and do so consistently.  But most investors and advisers fail at this vital task.

We spent years researching how to do just that and, after analysing hundreds of thousands of data points, we went public with our Dynamic Fund Ratings back in 2012.

For example, take the most popular sector for UK invested growth funds, UK All Companies.

By using our Dynamic Fund Ratings to select funds in this sector, from July 1994 to July 20212, you achieved a return 3.8 times bigger than the average fund, and 4.5 times bigger than an index tracker (after charges).

To put this in a monetary context, imagine you invested £100,000 back in 1994.  Today it would be worth:

  • £2,178,020 if you used our Dynamic Ratings to select funds
  • £561,010 if you chose an index tracker

That’s an extra £1,617,010!

If this was your SIPP invested through your working life, it would mean that you could generate an income 4.5 times bigger through retirement – that is genuinely life-changing.

This result was achieved by simply making vastly better choices, not by taking daft risks.

That is what our Dynamic Ratings enable you to do, consistently year after year.

Importantly, they are objective.  They are not based on some fund’s glossy marketing, an expensive lunch with their PR company, or the seat of pants judgement of a media type.

In the appendix we show you how Dynamic Ratings work in much more detail.

For the next section you just need to know that all funds have star ratings from one (loser) to five (winner).

Obviously, you want as many 5-star funds as possible when we look at your funds in the next section.

To bring this to life, in the above example you effectively saw 5-star funds compared to 3-star funds – the average funds and index trackers will typically be 3-star, at best.

This means that if you have any 1- and 2-star funds the gap between your fund and the best funds is even greater than you saw above.

2. Are your funds good enough?

Our ratings for each of your funds, sorted by their Dynamic Fund Rating (star rating), are shown in the table below.  Remember 5-star is the best rating and 1-star is the worst.

Fund Name Rating

Using the table above, look at the three paragraphs below and see which applies to you:

Mostly 4 and 5-Star Funds?

Well done.  If any funds have lesser ratings, do look to tidy these up.  You can do this by identifying a better fund and switching into this.  We make this very easy for you.

On the other hand, if all of your funds are 4 and 5-star quality, the trick is to keep them that way.  This means monitoring and reviewing – don’t fall in love with funds and keep them beyond their “sell by” date!  Again, we make this easy for you – see more below.

Mixed Bag?

There are some good funds, but you need to now bring them all up to that high standard.  You saw in the last section the huge difference between the best funds and the rest – let that inspire you to take action now.

Mostly 3-Star Funds or Worse?

Don’t despair!  You have already seen in the last section the huge difference between the best funds and average funds.  Your funds are mostly below average, but we make it easy for you to transform your fund holdings, and transform the outcome in the years ahead.  So let’s look at the action you can take right now to direct you down that more positive road.

 

3. Action to ensure you only invest in the best funds

You now know all about our “winning funds”, and the evidence for their success.  For you that is just the beginning.  You also need to have a plan to review the funds – there is no such thing as a perpetually good fund.  Plus, bad things can happen in markets – how will you respond?  This is where FundExpert comes in.

Our Gold Membership offers:

  • Access to our Unique Investor Tools for building your portfolios and rating your funds.
  • Stop-Loss Alerts when the markets are tumbling, to help protect the value of your investments.
  • Alerts when you should review your funds (typically 6 monthly)…
  • …with clear guidance on whether to hold or switch.

Plus, access to all of our research, weekly analysis, exclusive monthly teleconference, Private Members Community… and much more besides. All of this is available to Gold Members on FundExpert, to help you begin to transform your investing success.

What our Gold Members say

 
1 94% of funds do not qualify as Vintage, as of July 2021. To achieve a Vintage rating a fund must be in the top 40% of performers in its own sector 60% of the time. The “time” is the 120 overlapping 6-monthly periods in the last 10 years with a higher weighting being given to more recent periods.

2 This is our Dynamic UK All Companies Portfolio versus Aviva UK Index Tracker. Income reinvested. 1st July 1994 to 30th June 2021.

 

Appendix

How Dynamic Fund Ratings work for you

The problem for most investors is how to identify the best investment funds from the thousands available, and do so consistently, from year to year. If you wish to succeed as an investor it is vital you have a process, in this case a process for selecting funds with outstanding potential. And you must apply this process consistently.

That is exactly what our Dynamic Fund Ratings do.

You review your funds every 6 months – it will take about 30 minutes.

You identify the rating for each of your funds, where 5-star is the best rating.

If any fund does not have a 5-star rating at your review point, you switch into a fund which does.

Basically, a fund is given 5 stars if it is in the top 20% of funds based on the performance over the prior 6 months.

Why these ratings are important

The key to successful investing with funds is having a process which identifies funds with the greatest potential, plus when they should be sold – so far so simple. 

Yet the fund rating services which we encountered since the 1980s were lacking, to say the least. So, if we were going to come up with a successful method for rating funds, it MUST have these criteria:

  • Straightforward to identify top-rated funds.
  • The underlying process must be clear and understandable.
  • It must be repeatable.
  • There must be long term evidence that it generates extra growth.

The process

We back-tested various methods for selecting funds back to 1994. The method which stood head and shoulders above alternatives was what we now call Dynamic Fund Ratings.

Dynamic Fund Ratings met all of our criteria for an effective rating system:

  • The funds to buy are given 5 stars. Couldn’t be more straightforward.
  • The 5-star funds are the top 20% of funds over the prior 6 months. That’s clear.
  • It is easy to repeat this process every 6 months.
  • The evidence for achieving extra performance is superb.


The Legal Stuff

Important Legal Information

FundExpert, 3 High Street, Chislehurst, Kent, BR7 5AB

Any funds mentioned are risk investments.  Risk investments are not suitable for everyone and you should obtain personalised financial advice if you have any doubt about whether they are suitable for your particular circumstances.  If you withdraw from these investments you may not get back the full amount invested.  The value of risk investments can go down as well as up.

Past performance is no guarantee of future returns.  Your capital is at risk if you invest.

We have taken reasonable care to ensure that statements contained within this document are fair and accurate in all material respects but such accuracy cannot be guaranteed.  Nothing contained herein is an invitation to purchase shares or other securities.

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