This article was published originally at RankiaPro Spain by Amparo Sisternes, Head of RankiaPro. In spite of focusing on fund analysis tools available in Spain, the topic is interesting for European readers as they face the same problem: a vast offering of mutual funds that require the use of quantitative analysis tools. Moreover, the tools available for the Spanish fund analysts are the same ones available in Europe.
When selecting a mutual fund, professionals and selectors perform two kinds of analysis: a quantitative analysis based on the most important ratios and a qualitative analysis based on the management and capacity of the reaction of the management team. The combination of both analyzes provides a result that highlight those funds with better risk-adjusted performance, consistency and therefore single out good candidate. This analysis is carried out methodically and different periods of time are taken into account.
There are 7,000 funds registered for sale in Spain and many more becoming available. The huge offering is the reason why in recent years, different tools to simplify fund selection have appeared. These tools mainly save time in the quantitative analysis. The question is, what are the best tools to select funds? At RankiaPro, we analyze some of them in the following article:
Digital Advisor Spain
The tool allows a qualitative analysis based and the data feed is provided by Fundinfo and Lipper. On top of that, it leaves you the traceability on funds selected. It has digitized information on the Due Diligence for 3,000 best performing funds in Europe plus coverage of over European domiciled ETFs.
The tool aims to cover 140,000 ISINs, but today there are 110,000 incorporated. In practical terms, it means coverage of 98.7% of all the managers/funds sold in Spain. The tool allows comparison of the mutual funds different classes, commissions, target market as well as other ratios.
Morningstar´s team performs quantitative and qualitative ratings that allow the classification of investment funds by their returns and portfolio management skill among other information.
Share Class is a solution offered by Allfunds to help fund selectors within the MiFID II environment. The tool allows you to select the most appropriate class of actions according to three criteria: type of customer, type of service and cost.
Digital Advisor Spain – Juan Manuel Vicente Casadevall, advisor
The Digital Advisor Spain platform and services is a joint venture of FondosDirecto. It has two groundbreaking elements: first the digitalization and standardization of the due diligence of fund managers and funds, which in turn allows, among other things, to conduct an in-depth qualitative analysis more efficiently as well as leaving the traceability on the selections made. The second item is the incorporation of governance contents and functions which hugely simplify the compliance and regulatory requirements for an investment advisor.
The tool allows selecting according to by multiple quantitative and qualitative criteria; by investment categories, by fund name or fund manager or specific ISIN. Among the qualitative criteria we highlight those offering to the ownership of the fund management company and directors, its business focus or the bonus policy. About the investment team, we offer information about their experience, resources or continuity; as for the investment process of investment and risk management, we offer how the fund deploys derivatives, the alpha sources, style biases or risk policies. Finally, we offer comprehensive ESG information with multiple options such as exclusion criteria, adoptions of ESG criteria within the company, in its investment process and on individual portfolios. All based on the MSCI parameters. Thus, in seconds you can perform check-outs on qualitative criteria that could take hours before.
The tool allows users to rank and qualify funds, maintain multiple focus list, leave traceability of the entire analysis and selection process as well as leverage in the proprietary analysis of the DirectFunds team. It can generate all kinds of analysis or regulatory reports in English or Spanish on-demand including the brand image of each entity. A step head of quantitative analysis that empirically has proved unable to identify consistent good performance.