Research Process and Ratings

 

Square Mile’s fund research is distinguished by its depth and detail. Rather than just explaining what a fund does and how it is constructed, we seek to understand how the fund behaves, whether it will consistently deliver on its objectives, and whether it represents good value for investors.

We focus on identifying “best-in-class” funds and gaining the fullest possible knowledge and understanding of those funds. Our ratings process is fuelled by a qualitative research process that focuses on the fundamentals: manager and environment; investment philosophy and objectives; investment process; portfolio construction; management of risk; and value for money.

Square Mile’s analysts examine how the portfolio is constructed, and ensure that the level of risk is proportionate to the fund’s mandate and structure. Above all, they look for clear evidence that the manager can achieve their stated objective. They also undertake thorough quarterly reviews of every fund included in our rated or recommended lists. Reviews are detailed and intensive, and are conducted following a discussion with the fund manager.

To find out more about the Square Mile Fund Research Process please click here.

Ratings


A Square Mile Fund Rating denotes a fund that is truly “best in class”. Put simply, a Square Mile Fund Rating is only given to a fund that we are prepared to recommend to our clients. Fund managers do not pay for our ratings; they cannot be purchased and are only achieved by the “best-in-class” funds.

The funds we recommend are each assigned a rating – A, AA, AAA or R – reflecting Square Mile’s conviction in each fund's ability to deliver on expectations. These simple ratings are the result of exhaustive and detailed qualitative research, backed up by quantitative analysis. “AAA” represents the very highest level of conviction in a fund and its manager, and is a practical demonstration of our belief in the long-term consistent delivery of the fund's objectives.

Our team of investment research analysts also works to identify newer or untested funds or managers that have real potential to deliver their stated objectives. In these circumstances, we are not in a position to award a full fund rating, and therefore these funds are assigned a “Positive Prospects” rating. Over time, if these managers deliver to our expectations and achieve their expected outcome, we would expect them to progress to A, AA, AAA or R ratings.

Responsible ratings

Responsible ratings run along the same scale as our standard ratings, with gradations which express our confidence in a manager's ability to meet their objectives. The only difference between the two scales is that responsibly rated funds will have a responsible outcome or target incorporated into their objectives or mandate, and our expression of confidence is in the manager's ability to meet both aspects of their objectives.

To find out more about Responsible ratings please click here.

 

Latest Insights

Rating Change for the LF Lindsell Train UK Equity fund

Following an extensive review of the LF Lindsell Train UK Equity fund, we have taken the difficult decision to downgrade the fund’s rating from AAA to...

read more

16 Fund Managers, 16 Seconds

16 Fund Managers in 16 seconds - click below to view the fund manager takeaways from the Square Mile Investment Conference:

read more