Research house IPAC Securities is to launch a star rating system based on the quantitative performance of funds early in 1998.
Along with the star ratings IPAC will reconfigure its existing fund rating structure.
General manager David van Schaardenburg says "the proposed changes will enhance the user friendliness of IPAC's present qualitative fund ratings and add a separate purely quantitative fund rating."
The new star ratings are similar to what United States research house Morningstar uses compared to the system, devised by FPG Research, which combines quantitative and qualitative factors.
Van Schaardenburg says the quant star system will be a quick and ready reckoner for looking back at a fund's performance on a risk-adjusted basis, while the qualitative research will be forward looking.
IPAC's qualitative rating structure moves to a AAA basis predicated on IPAC's four Ps assessment process, (that is people, process, portfolio and performance).
While FPG Research charge managers for use of its star ratings IPAC has not considered that option.
"We haven't ruled anything out, but we haven't considered it either," van Schaardenburg says.
He says these changes come out of a strategic review IPAC has done of its operations. The key points of the review were that IPAC needed to evolve and add to the research services it provides to clients, and the need for it to unbundle its services so that client needs are catered for individually.
"For some clients qualitative fund ratings may be appropriate, but investment strategy may not be," van Schaardenburg says.
Full implementation of these changes will take place before April 1, 1998.
Research house IPAC Securities is to launch a star rating system based on the quantitative performance of funds early in 1998.