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| ASSIRT Means Research |
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If there is one word to describe
ASSIRT, it would be 'research'. ASSIRT's aim is to deliver
to clients high quality, original, and timely investment advice
and quality research.
Advisers are the Key
ASSIRT clients comprise of three related but distinct groups.
First are advisers, who work for financial planning and stockbroking
firms. Second are investment management companies. Finally,
there is a broad range of other financial institutions that
have a need for managed funds data, research and information.
Research and Advice
Fund manager ratings, the cornerstone of ASSIRT's research
business, provide two valuable outcomes. First, the rating
process results in an independent and in-depth analysis of
fund managers. Second, the rating process mines a huge amount
of valuable investment information, which can then be re-fashioned
into valuable investment ideas and delivered to our most important
client, the adviser.
Information Services
Collecting and selling data (about funds and fund managers)
is the other key part of our business. We
re-sell this data in many forms. It may be sold in raw form
to a financial institution, like a margin lending company,
or to a financial website. ASSIRT may process the information
and sell it as part of a quantitative research tool, such
as ASSIRT Software's Adviser Library. And most importantly, ASSIRT
will interrogate the data to produce original investment ideas.
Financial Services Trends
and Issues
To complete the package ASSIRT Market Research undertakes
both syndicated and customised market research on financial
services trends and issues.
Respected Research
The key to ASSIRT's past and continuing success remains the
quality of investment research and advice and the respect
with which the advisory community accords this research. However,
producing quality research is just the first step. ASSIRT's
goal is to develop a strong and trusting relationship with
clients and then execute with clean and simple delivery.
ASSIRT Plans
ASSIRT's business success is dependent on it improving its
range of high quality, interactive, research and its advice
based relationships with advisers. With
this fact in mind ASSIRT has prioritised development of those
products that will help ASSIRT remain competitive in the adviser
market. This means that they are actively creating new research
publications and consulting services that better meet the
needs of advisers and their dealer groups.
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| Find out more about ASSIRT |
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| ASSIRT Ratings |
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ASSIRT Ratings was established in
1994 as the first ratings house in Australia, to research
fund managers and managed investments on behalf of financial
planners and intermediaries.
Since then, ASSIRT Ratings has developed its rating process
to best practice standard. This has been achieved through
the development of sophisticated analytical models and a rigorous
process of assessment. ASSIRT Ratings is an extremely thorough
analysis of investment managers and their products. ASSIRT's
standards of assessment and reporting are world-class.
Ratings have been carried out on over 30 investment managers
in Australia and 600 funds. This represents a significant
majority of the funds under management within Australia. ASSIRT's
client base comprises most of the mainstream fund managers
in the country. |
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| ASSIRT data timeliness
and accuracy |
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ASSIRT aims to provide the most accurate and up to date
information that is available on Australian managed investments.
To ensure ASSIRT data is both as timely and as accurate
as possible, ASSIRT supports and encourages the electronic
supply of data by fund managers. This enables fund managers
to deliver information direct to ASSIRT in formats that
meet the practice guidelines of the Investment and Financial
Services Association. Over 70 percent of data is received
and processed by ASSIRT electronically. The systems employed
allow the fund manager to check the data before it is sent
to ASSIRT. The data is further checked by over 40 audit
reports before it enters the ASSIRT database. Even after
such rigorous checking, data can still be distributed within
24 hours of receipt. This means accurate and relevant comparisons
of managed investments are achievable for all users of ASSIRT
data. In essence the data is as accurate and as timely as
fund managers are able to provide.
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| ASSIRT Fund Ratings
process |
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ASSIRT Ratings seeks to help investors in choosing which
funds to invest in by identifying for them quality managers
offering quality funds.
To fully and fairly assess each funds management operation
ASSIRT uses a highly systematic and disciplined approach.
ASSIRT Ratings has a team of six analysts under a Senior
Research Manager dedicated to permanently reviewing fund
managers and their funds. A Rating typically takes around
two and a half months to complete and involves around 200
hours of analyst time. This ensures ASSIRT Ratings are based
on a deep understanding of a fund manager’s operation.
A Rating is only valid for twelve months, is formally reviewed
after six months for any changes, and may be suspended at
any time if a significant uncertainty affecting the manager
occurs. This ensures that ASSIRT Ratings are always current
despite the frequent changes to investment teams and processes
that occur in the fund management industry.
To assess the quality of a particular managed investment
and the likelihood that it will achieve its investment objectives
the ASSIRT Fund Rating considers the following:
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Manager
Capability: ASSIRT believes the investment management
capability of a manager is the single most important
factor that determines whether a managed fund will meet
the needs of an investor. An ASSIRT Fund Rating therefore
considers the managers' capability, particularly its
decision making process, and its ability to add value
to the investors' money. Elements of this consideration
include their research, the investment team, their risk
management, the investment process and that it is consistently
applied. |
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Past
Performance: The Fund Rating also considers the
past performance of the fund. However a Rating is not
based solely on the manager’s past performance.
Instead ASSIRT Ratings seeks to understand the factors
that were the drivers of the manager’s past performance
and to identify whether these factors have changed or
are sustainable. ASSIRT Ratings will take a prospective
view of the manager’s capability and likely performance,
where we believe this view is realistic and justifiable.
To provide a fair basis for comparison, funds are compared
against a benchmark of like funds. The benchmark normally
used is based on the fund’s actual asset allocation
over the previous three years. Diversified funds are
assessed against standard indices, weighted to the fund’s
benchmark asset allocation. To ensure the investor is
getting value for his ongoing management fees and taxes
ASSIRT looks for satisfactory after-fees performance,
relative to this benchmark. ASSIRT Ratings also include
consideration of the risk taken by a fund to achieve
returns. Performance is assessed for both the risk-adjusted
returns achieved over the relevant benchmark, and against
the risk incurred relative to the benchmark. A fund
should be able to demonstrate satisfactory performance
over the long term, across a range of market conditions.
The track record required for various fund categories
is five years for growth and diversified funds, three
years for defensive sector funds, and one year for cash
funds. |
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Fund
Issues: ASSIRT believes that the quality of information
provided to an investor is important because an investor
who is well informed is more likely to have realistic
expectations about a fund. A Fund is therefore assessed
to see that it discloses an appropriate measurable objective
in the prospectus as well as a sensible investment strategy
and process to achieve that objective. There should
also be an adequate ongoing reporting regime to investors.
ASSIRT checks that the fund is true to its label in
terms of the assets it invests in. ASSIRT looks for
funds that are good value for money offering a fee structure
that benefits the investor. This may be rebated entry
fees, MER caps, or switches, and exit fee options, etc. |
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| ASSIRT Fund Rating
Definition |
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| Fund
Rating |
Definition |
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An
excellent fund with very strong management,
a comprehensive investment strategy and strong
past performance. |
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A
very good fund with strong management, a sound
investment strategy and solid past performance. |
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A
competently managed fund, but with either an
unimpressive or limited performance track record.
Potential to improve exists. |
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A
fund with a weak investment management capability
or strategy, and/or a poor or very limited performance
track record. |
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A
poor quality fund with major weaknesses and/or
issues affecting the fund’s management
and performance. |
| On
Hold |
Issues
potentially affecting the management of the
fund have emerged. The Rating is temporarily
suspended, pending clarification. |
| Not
Rated |
The
fund manager or the fund has not been rated
by ASSIRT. |
| Sell |
A
fund with significant issues that have the potential
to adversely impact performance. |
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| Investment Grade is defined as or
better. Where no rating appears the fund is not currently
rated by ASSIRT. |
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| Frequently Asked
Questions |
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Q:
Who awards the stars?
A: ASSIRT Pty Ltd
awards the stars. ASSIRT is an Australian owned investment
research company. ASSIRT began researching managed funds in
Australia in 1986 and was the first to develop ratings for
Australian managed funds in 1994.
Q: What do the stars mean?
A: The Stars measure
ASSIRT's opinion of the overall quality of a managed investment
and the likelihood that the fund will achieve its investment
objectives.
Q:
How many stars can a fund get?
A: A fund may be awarded
between 1 and 5 stars. The Fund Rating may also be ‘Suspended’
if a significant event has occurred which ASSIRT believes
may affect the interests of investors.
Q:
Why do only some funds have stars?
A: A fund may not
have an ASSIRT Fund Rating because its manager has not asked
ASSIRT to perform a rating, or because ASSIRT does not believe
the manager meets our minimum standards to be rated.
Q:
How does a fund manager get rated?
A: Fund managers request
ASSIRT to perform a rating. If they meet our minimum standards
then ASSIRT will agree to carry out a rating. In being Rated
a manager submits itself to a thorough process of analysis
by ASSIRT. The Rating takes two and a half months to complete
during which there are a number of meetings with the manager.
Over 400 factors are examined and over 200 hours of analysis
are completed.
Q: What is the basis for awarding
stars?
A: The ASSIRT Fund
Rating assesses the quality of a fund and the likelihood that
it will achieve its investment objectives. Funds are assessed
and scored against over 400 criteria. The main area considered
is the managers' investment capability and expertise (55%).
This includes their people, research, investment process,
and risk management. The performance (25%) of a fund is also
considered. Past performance is considered to be relevant
only where there have been no significant changes to the investment
process or investment team. ASSIRT Ratings will take a prospective
view of the manager’s capability and likely performance,
where we believe this view is realistic and justifiable. Finally
issues particular to the fund itself (20%) are considered.
In particular ASSIRT believes that the quality of information
provided to investors is important because investors who are
well informed are more likely to have realistic expectations
about a fund.
Q:
What about risk?
A: ASSIRT Ratings
include consideration of the risk taken by a fund to achieve
returns. Performance over the long term across a range of
market conditions is assessed for both the risk-adjusted returns
achieved over the relevant benchmark, and against the risk
incurred relative to the benchmark.
Q:
Where can I find out more about an ASSIRT Fund Rating?
A: Financial planners
have access to the full detailed research that goes into an
ASSIRT Rating, including a Rating of the fund manager that
is not available here. You can look up a financial planner
near you on the web site myadviser.com.au or on the web site
of the Financial Planning Association of Australia at www.fpa.asn.au.
Please note that not all financial planners listed on the
FPA site will have access to ASSIRT Research, although many
will.
Q:
How do ASSIRT Fund Ratings compare to other ratings?
A: Other rating systems
are not comparable and should not be compared with ASSIRT
Ratings. ASSIRT Fund Ratings are the result of a process unique
to ASSIRT and which we continue to refine specifically for
the professional Australian investment market. Financial planners
and advisers throughout the country rely on the research behind
ASSIRT Fund Ratings. The ASSIRT logo and name tell you when
you are using ASSIRT Fund Ratings.
Q:
Five star funds have performed best, right?
A: Not necessarily.
ASSIRT Fund Ratings are based on more than just past performance,
which is in itself no guide to future performance. ASSIRT
Ratings will take a prospective view of the manager’s
capability and the fund’s likely performance, where we
believe this view is realistic and justifiable. ASSIRT Fund
Ratings represent our opinion on a fund’s quality of
management, investment strategy and value for money.
Q:
Are the stars ever wrong?
A: ASSIRT Ratings
have a track record since 1994 of which we are justifiably
proud. The Investment Grade List as a whole (all 3, 4 and
5 star funds) has performed significantly better than the
average of comparable funds. However all investments are subject
to risk and there are no guarantees that any one fund will
always outperform.
Q:
How often are funds Rated?
A: ASSIRT Fund Ratings
are carried out annually and are usually valid for a period
of twelve months. ASSIRT reviews the Rating approximately
six months after the initial Rating, to assess the impact
of any changes in the manager’s investment process, personnel
or performance and to update the Rating of those sectors or
funds that have been affected by the changes. Should there
be any significant change in the status of the manager’s
operations, which ASSIRT believes will adversely effect the
interests of investors, ASSIRT may either re-rate or suspend
the Rating of the affected funds at any time. |
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| Glossary of Terms |
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| Managed
Fund Term |
Glossary
description |
| APIR
Code |
The
unique code issued for the fund by the independent
Asia Pacific Investor Register. |
| Assets |
Investments
owned by the managed fund. Assets may be classified
as Australian or international shares, listed
property securities, direct property investments,
cash and fixed interest securities. |
| Asset
allocation |
The
proportion of all money invested in one group
of assets versus other groups. |
| Category |
The
ASSIRT Publication Category. Funds are grouped
in categories by ASSIRT to ensure that only like
funds are compared with one another. This categorisation
is based first on the investment tax structure
and then on the asset allocation of the funds. |
| Current
Price |
Refers
to the exit price at which investors redeem units,
and may or may not be inclusive of exit fees depending
upon organisational practice. |
| Effective
Date |
Refers
either to the date at which the price of a fund
applies or to the date up to which its performance
is calculated. |
| Fund
Manager |
The
company issuing the managed fund. |
| Fund
Name |
A
thirty character description of the managed fund. |
| Investment
Tax Structure |
Funds are grouped in categories by ASSIRT to ensure
that only like funds are compared with one another.
The first categorisation is on the basis of the
tax paid by the fund. For example all super funds
are taxed at 15% at the fund level. The other
investment tax structures are trusts, allocated
pensions and annuities, friendly society bonds,
and insurance bonds. |
| Managed
fund |
Funds
belonging to investors that have been pooled together
by a Fund Manager. |
| MER |
Management
expense ratio. The total of annual management
fees and ongoing expenses of the fund, expressed
as a percentage of the total funds under management. |
| Performance |
See
returns. |
| Product |
A
particular managed investment fund. |
| Returns |
Investment
returns can be generated from capital growth and
income. Capital growth occurs when there is an
increase in the market price of the assets in
a managed fund. A capital loss is the other side
of the coin: a fall in market prices of investment
assets. Income is the distribution from the fund. |
| Returns
cumulative % |
The
performance return for periods less than a year
measures the cumulative change in capital value
of the fund over the period (13 weeks or 26 weeks)
to the effective date. Assumes reinvestment of
income and is after the MER and on going expenses
but excludes any entry and exit fees. |
| Returns
% pa |
Performance returns for periods of a year or more
measure the average change in capital value of
the fund per annum for the period (1, 2, 3, 4,
5 years) to the effective date. Assumes reinvestment
of income, and is after the MER and any on going
expenses but excludes any entry and exit fees. |
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