SharingAlpha releases updated list of top rated funds

SharingAlpha has released its updated list of top rated funds.

The methodology behind the fund rating
Step 1
Fund selectors are asked to rate the funds based on their expectations in terms of the fund’s chances of outperforming in the future. The 3 parameters on which the overall rating is determined are factors that are expected to influence future performance:
• People – The experience and competitive edge of the fund manager and their team;
• Price – The cost of the fund;
• Portfolio – The way the strategy is run in terms of risk management etc.

Step 2
SharingAlpha calculates the average ratings assigned by its users to each fund. It’s important to note that SharingAlpha only takes into account ratings from users that they can identify as professional fund selectors. Hence, anyone can technically signup and rate funds, however, in the fund rating calculation they don’t include ratings coming from users that are, for example, non-financial industry members or fund providers.
Furthermore, in order to improve the quality of the aggregate ratings, instead of using an equal averaging of the rankings they provide a higher weighting to raters that have a better track performance on the platform.

Step 3
A fund rating of above 3 implies that our raters expect the fund to create alpha in the future which makes this a powerful and unique rating. Funds with an average rating of above 4, based on at least 10 professional raters, are entitled to present the ‘Highly Rated Fund’ SharingAlpha rating logo.
Fund selection ranking methodology
SharingAlpha’s fund selection ranking is determined by professionals ability to assess the future performance of the funds relative to a comparable ETF.

In case the rater expects the fund to outperform the ETF then the overall rating they assign to the fund will be over 3. It will be closer to 5 in case they have a strong conviction. Hence, a rating of between 1 and 3 is given to funds that are expected to generate negative alpha and a rating of between 3 and 5 is given to funds that are expected to generate positive alpha.
On a monthly basis they compare the ratings with the actual performance of the fund versus the ETF, the closer the prediction with the actual reality the higher the score they get for this rating.

They call this the Hit Score. They compare the overall average Hit Score of all the funds rated by the member and compare it to other members’ average Hit Score and rank them accordingly.

Oren Kaplan, CEO and co-founder of SharingAlpha, says: “We’re seeing continuous growth in the usage of our unique search engine. Essentially, fund selectors use our tool to screen for funds that have been highly rated by other professional fund buyers. Joining the SharingAlpha community is totally free for professional investors and the sooner they start building their track record the better since a long term track record is more meaningful.”

HIGHLY RATED FUNDS

HIGHLY RATED FUNDS BY CATEGORY