Warning on fund ratings bias as smaller products 'overlooked'

Variable buy list quality

Fund ratings and best buy lists are of variable quality with smaller products and providers often overlooked, according to a new report.

Best buy lists and rankings from fund rating agencies may be misleading as they do not always include vehicles based on their quality and longevity of returns, the research found. This means some clients may be put in funds that are destined to perform well in the short-term but lack other fundamental strengths that would allow them to function well over longer periods. The report by research consultancy Fundscape and gbi2 found deviations in the ratings of some funds and their projected returns over a ten-year horizon - the minimum time a fund's performance should be analysed to ensu...