S&P launches ETF grading system

S&P Capital IQ has launched a grading system for ETFs that will treat passive funds as a separate asset class.

The methodology will grade the best passively-managed ETFs and index tracker funds as Platinum, Gold or Silver. Actively-managed ETFs will be graded under the long-standing active fund grading methodology. S&P Capital IQ fund research will compare passive funds' historic tracking errors and charges as well as assess how groups add returns to offset fees and expenses along with operational risk The underlying indices will also be considered according to their liquidity and replicability. S&P Capital IQ predicts the growth of low-cost passive strategies within Europe will accelerate ...