Keyword Search

 
 search
Advanced Search »
 
 
 Calculator Calculator
Time Zone Time Zone
You are here:  Trustnet     Education    Education Guides    Crown Ratings Guide
SearchAd
 

Education

Dragon Ratings Guide

 

Rating Methodology
To be eligible for rating, a fund must possess the following characteristics:
  • Possesses a 3 year track record.
  • Maintains an accurate and consistent history.
  • Operates within a sector of at least 10 funds or more.
  • Does not belong to a specialist or unclassified sector.
The methodology behind the ratings is explained by addressing the 3 main inputs in more depth.
Alpha
Recent history has been treated as more relevant than that of more remote past, and the model is weighted accordingly. The fund's alpha measurements are taken over 36 months, 35 months, 34, and so on through to 12 months. This collection of alpha measurements is then averaged to produce an overall alpha. In this way, the 12-month measure features in every alpha calculation, while the 36-month figure is only included once, and so the weighting is achieved.
The alpha for each fund is then re-scaled and ranked, so that the lowest becomes zero, and the highest scaled as 100. The resulting value between 0-100 for each fund is the alpha component of the rating.
Volatility
The volatility measurements are treated in the same way as alpha to produce this component of the Financial Express Dragon Ratings. This applies generally, but exceptions are made for sectors which inherently carry lower volatility. For most bond funds, volatility is only given half weight - scaled from 0-50 - and cash funds dispense with a volatility component altogether.
Consistency
This is based on the fund's total return history (with net income re-invested), taking 3 years-worth of quarterly performance. On this basis, each fund is ranked within its sector and its percentile performance established. The percentiles are then averaged to produce an overall consistency measurement.
As before, the resulting body of figures is re-scaled from 0-100 to form the consistency element of the rating.
Previous Section «
Next Section »

Back to top of pagetop

News & Research

More Research: August

alter Investors should follow Chinese government policy closely
alter Managers expect slowdown in China growth

View all research»

 
 
 
 

Tools

Toolset

View all tools »